Miller Magazine Issue: 121 January 2020

26 NEWS MILLER / JANUARY 2020 Brazil, China finalizing soymeal export protocol Agribusiness giants’ new block-chain initiative named Covantis Brazilian and Chinese government authorities are fi- nalizing a protocol setting health standards for domestic processors to export soymeal to the Asian country, André Nassar, president of oilseeds industry group Abiove, said. The health guidelines will allow companies to export and eventually compete with soy processors based in China, something they cannot do now. The change is happen- ing as local processors are required to increase crushing to produce more biodiesel to boost local blending. The added output of soymeal, a byproduct, would need new buyers. Brazil exports a lot more raw soybeans than in meal form, and the industry would prefer a better bal- ance, Nassar said. Soymeal is used as livestock feed in China and other meat producing nations, and demand for soymeal should rise in China as it restores pork production after an out- break of African swine fever, Nassar said. Brazil processed an estimated 43 million tonnes of soybeans in 2019. By 2023, processing will grow by an estimated 9 million tonnes as the government raises to 15% the mandatory quantity of biofuel that will be blended into diesel, Abiove projects, from 11% currently. Nassar said Brazilian authorities were in advanced talks to finalize the health protocol to export soymeal, though no date has been set for its announcement and implementation. Abiove does not expect China to stop buying soybeans and start buying Brazilian meal once the protocol is in place, Nassar said. “2020 will be the year when we will open new markets. There is still hard work to do to sell products of higher aggregate value,” Nassar said. The Eu- ropean Union buys about half of Brazil’s soymeal, or 8 million tonnes. The founding members (ADM, Bunge, Cargill, COF- CO International, Louis Dreyfus Company and Glencore Agriculture) of the industry-wide initiative to modernize global trade operations have announced its new project name: Covantis. Covantis is a blockchain initiative fo- cused on modernizing global trade operations. The ini- tiative aims to bring efficiencies and cost savings to com- panies throughout the international supply chain. The initiative also launched a new web- site, www.covantis.io, which explains the initiative’s vision to connect the agri-indus- try via an independent and trusted digital platform to en- able post-trade efficiency for all participants. Covantis will also be the name of the digital platform now in develop- ment and expected to launch in 2020 subject to regulato- ry approvals. The Covantis initiative also announced that Stefano Rettore will lead the project as an independent advisor during its development phase – including oversee- ing the search for a CEO – until governance is in place and a CEO is appointed. The future entity, executive appoint- ments and the platform itself remain subject to regulatory approvals. Rettore has more than two decades of global experience in the agribusiness industry. He served as pres- ident of ADM’s origination business and, prior to that, as the company’s chief risk officer. Before joining ADM, he held a series of leadership positions at agricultural co-op CHS Inc. “I am delighted to help lead the Covantis initiative as we build toward the launch of a ground-breaking new technology platform,” said Rettore. “Covantis offers a path to improve agricultural trade, un- locking significant value for all players across the supply chain. By working collaboratively with the industry, we have an opportunity to build a more effective, more effi- cient digital future for global trade.”