One-quarter of the world’s sugarcane land is engaged in some way in Bonsucro’s standard and Latin America is a key region for the organization where it currently has 82 certified mills, representing 71% of its total certifications.
Last month, the non-profit organization that certifies sugarcane producers as sustainable, launched its Credit Trading Platform, a digital tool that connects buyers and certified sustainable producers from around the globe to increase responsible practices in the sugarcane sector by making trade easier.Previously companies could trade raw sugar and ethanol credits but this was done off-line, through direct contacts and negotiations.
The new platform introduces a series of changes that improve the system for both buyers and sellers, said Laura Fisher, head of corporate services at Bonsucro.Certified Bonsucro products can either be sold through a physical supply chain (mass balance) or as credits.
While previously Bonsucro only offered credits for raw sugar and ethanol, manufacturers can now buy credits for sugarcane and molasses, with one credit representing one tonne of sugarcane, molasses or raw sugar, or one cubic meter of ethanol.
“Credits are an effective way for manufacturers to achieve their sustainability targets and, at the same time, they reward certified producers and invest in improvement projects run by Bonsucro through a fee charged on each credit purchase. Once they buy credits, they are able to make public claims about their commitment and investments in sustainable sugarcane products,” Fisher told FoodNavigator-LATAM.
Going beyond the usual business network
The online credit trading platform gives sellers a global reach, far beyond their usual business network, according to the certifier. A live auction section allows sellers to make sales offers while buyers can bid, with the system automatically matching offers based on price.
According to Bonsucro, the platform also introduces price transparency for the first time.
“By offering insights on the current trade prices of Bonsucro credits, certified producers gain increased knowledge of the market price for certified sustainable sugar products,” said Fisher.
A portion of the fees from credit sales is then directly invested in initiatives that help farms and mills adopt more sustainable practices. The digital platform also estimates how many hectares of land were managed under the Bonsucro production standard, giving buyers an idea of how much land their purchase impacts.Manufacturers looking to use the platform must first become Bonsucro members.
After a 30-day public consultation and payment of membership fees, they can access the platform and start trading.
Bonsucro estimates a 12 to 15% growth rate until mid-year 2020 for the Latin American region.
Brazil is by far the biggest sugarcane producer in Latin America. In 2017, it produced over 750 million tonnes, according to data from the United Nations’ Food and Agriculture Organization (FAO), followed by Mexico (just under 57m mt), Colombia (nearly 35m mt) and Guatemala (nearly 34m mt).