China Begins Purchasing Food Products Produced With Sustainable Practices

By Mei Mei Chu, Reuters

BEIJING — China’s flagship food group COFCO International landed its first cargo of deforestation-free soybeans for domestic use on Friday, marking what industry players say is a milestone for a country that has prioritised price over sustainability in its farm imports.

China is a top buyer of agricultural goods, including soybeans and beef, which are drivers of global deforestation, but has lagged western peers in demanding that produce including palm oil not be sourced from land linked to deforestation or conversion of natural habitats.

That is slowly changing, with state-run COFCO International as well as China Mengniu Dairy Company (2319.HK), opens new tab and Inner Mongolia Yili Industrial Group Co Ltd (600887.SS), opens new tab in the past year asking suppliers and consultants for sustainable soybeans, traders and sustainability experts told Reuters.

The volumes are tiny in the context of China’s overall buying but the implications of the greener sourcing are significant, given China’s voracious appetite for agricultural goods, even as it seeks to cut its dependence on imports.

The participation of COFCO, which brought in Friday’s cargo at Tianjin port for Mengniu’s subsidiary Modern Farming Group, also sends a signal to other buyers of Beijing’s intent.

“There is a noticeable shift in buying trends among Chinese buyers towards more sustainable and environmentally friendly products,” a Singapore-based broker said, declining to be named due to business confidentiality.

Some Chinese companies have been “aggressively” asking for deforestation-free soybeans and carbon-neutral vegetable oil since last year, a manager with a global trading firm said.
Friday’s 50,000 metric ton cargo of Brazilian soybeans worth $30 million had a deforestation and conversion-free (DCF) clause for the first time for an order of the oilseed from China.

“Our industry must take action to help strengthen our food systems (and) promote sustainable agriculture practices that protect our climate and environment,” COFCO International Chief Executive Wei Dong said in a statement.

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