Global commodity traders to monitor deforestation in Brazil's savannah

BRASILIA (Reuters) - Six major commodities traders, including Cargill Inc and Bunge Ltd, have agreed to a common mechanism to monitor soybean supply chains for deforestation in Brazil’s vast Cerrado savannah, according to a statement on Friday.

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The Cerrado covers roughly a quarter of Brazil’s territory, the nation’s second-largest biome after the Amazon rainforest. Its plants sink deep roots into the ground, often likened to an upside down forest, forming a major carbon sink whose preservation is vital to the fight against global warming.

Companies belonging to the Soft Commodities Forum network that signed onto the agreement to monitor their soy supply chains in the Cerrado include Archer Daniels Midland Co, COFCO International, Glencore Plc’s agriculture unit and Louis Dreyfus Company, according to a Forum statement.

The companies agreed to detail how much soy is coming from the Cerrado and purchases made in municipalities at the highest risk of deforestation. The first findings will be presented in June.

The statement did not say the companies agreed to end deforestation in the Cerrado.

“We are continuously seeking to rise to the challenge of feeding the world’s growing population in a sustainable manner,” Louis Dreyfus Chief Executive Ian McIntosh said, according to the statement.

“This means being mindful to preserve the environment, including areas of importance for their biodiversity. Brazil’s Cerrado Biome is one such area, where every effort must be made to ensure that any agricultural expansion occurs hand-in-hand with the preservation of native vegetation.”

Roughly half of the biome’s native forest and other vegetation have been destroyed in the past 50 years, with newly cleared land feeding Brazil’s soy boom. The country is the world’s largest exporter of soybeans.

Last year, Louis Dreyfus became the first major trader to commit specifically not to buy soy from newly deforested land in the Cerrado, although it gave no specific deadline for doing so.

While many other trading firms have committed to reaching zero net deforestation in their supply chains globally by certain dates, they have yet to make specific pledges to end destruction in the Brazilian savannah.

Reporting by Jake Spring; Editing by Dan Grebler