By Andreia Lobato | 2025-04-15

RIO DE JANEIRO -- Chinese purchases of Brazilian soybeans from deforested land are making a mockery of China's professed commitment to protecting the environment.

Chinese state-owned Cofco, one of the biggest buyers of soybeans in Brazil, announced in July 2019 that it had taken out a $2.3 billion corporate loan at favorable rates -- the largest ever granted to a commodity trader linked to sustainability goals.

Cofco repaid the favor by buying soybeans from deforested land.

Cofco's massive footprint

Cofco (China National Cereals, Oils and Foodstuffs Corporation) is one of China's largest state-owned enterprises in the food and agribusiness sector.

In Brazil, where it has operated since 2014, Cofco has become a leading buyer of sugar, corn and especially soybeans. It purchases, processes and exports Brazilian grains to supply China.

Cofco's operations in Brazil were key to securing a so-called green loan, coordinated by Spain's BBVA and backed by 19 other financial institutions.

The $2.3 billion loan offered a lower interest rate in exchange for Cofco's commitment to trace the origin of soybeans purchased in Brazil and help combat deforestation.

However, an investigation by the Rainforest Investigations Network and Repórter Brasil, published in January 2023, found that, while benefiting from the loan, Cofco bought soybeans grown in deforested areas.

It made the purchases through Nutrade Comercial Exportadora, a subsidiary of Swiss agrochemical giant Syngenta. As an indirect supplier, Nutrade allowed Cofco to technically comply with the loan's terms -- while trashing its spirit.

Using satellite imagery and public data, the investigation traced some of Cofco's 2021 soybean purchases in Mato Grosso to farms with recent deforestation. It exposed serious gaps in supply chain oversight and cast doubt on the company's commitment to zero-deforestation goals.

Violation of Soy Moratorium

Among the properties flagged in the investigation are Fazenda União I and II, owned by farmer João Luiz Lazarotto. These areas, used to grow soy, corn and cotton, supplied grain to Cofco via Nutrade.

Invoices reviewed by reporters confirm the transactions.

The farms lie within Brazil's Legal Amazon -- a region that the law defines for targeted environmental protection and sustainable development. Workers deforested those farms after 2008, according to satellite data from the MapBiomas platform.

That date is critical: under the Soy Moratorium, a landmark agreement signed in 2006 by major agribusinesses, NGOs and the Brazilian government, companies pledged not to buy soy grown on land deforested in the Amazon after July 2008, regardless of whether the clearing was legally permitted.

As a signatory, Cofco should not have sourced soybeans from those farms.

Deforestation in the Cerrado

The investigation also uncovered a case involving a Cofco supplier operating in the Cerrado -- Brazil's vast tropical savanna, which spans central and northeastern regions and ranks as the country's second-most deforested biome, after the Amazon.

In March 2021, Uggeri Agropecuária, a company based in Nova Mutum, Mato Grosso, delivered a series of soybean shipments to Cofco's warehouse in nearby Lucas do Rio Verde.

Documents reviewed by reporters show that a contract signed in November 2020 between Cofco and Nutrade -- the intermediary -- covered the supply of 1,300 tons of soybeans from Uggeri.

The company owns Fazenda Ranchão, which produces grains and cereals. Adjacent to it lies Fazenda Ranchão II, where the Mato Grosso state environmental agency (Sema-MT) seized three plots in August 2015 because of environmental violations.

Despite the sanctions, satellite imagery shows that Uggeri continued farming the embargoed areas while still supplying Cofco.

This activity contradicts Cofco's publicly stated social and environmental commitments since the contract between the Chinese company and Nutrade remained active -- suggesting that, for a significant portion of the agreement, soybeans of irregular origin entered Cofco's supply chain, say analysts consulted for the investigation.