By Maytaal Angel and Julia Payne

LONDON/BRUSSELS, Oct 8 (Reuters) - Companies that have

paid to source agricultural produce that complies with the

European Union's anti-deforestation law would lose out if the EU

decides to delay implementing the legislation by a year,

industry groups and traders said.

Deforestation is the second largest source of the greenhouse

gas emissions that cause climate change after the burning of

fossil fuels. The EU had planned to ban the import of

commodities from suppliers unable to prove their goods were not

linked to deforestation.

The EU Deforestation Regulation (EUDR) would have impacted

imports of cocoa, coffee, cattle, soy, oil palm, timber, rubber

and related products like chocolate and leather.

It was scheduled to come into effect on Dec. 30, but last

week the EU Commission proposed a 12-month delay, under pressure

from industries and governments who said it would cause supply

chain disruptions, exclude poor, small-scale farmers from the EU

market, and drive up the cost of basic foodstuffs because many

farmers and suppliers were not ready to comply.

The EU's vegoil and oilmeal group Fediol said its members -

which include trading giants such as Cargill and food processors

like AAK - will suffer losses from a delay after

paying premiums to secure raw materials that comply with the

law.

"It's a financial loss they are making by having been ready

on time," Fediol director general Nathalie Lecocq told Reuters.

Cocoa processors and chocolate makers face the same scenario

with traders saying they had sold deforestation free beans to

them at a premium of up to 6%, amounting up to 300 pounds a ton.

The premium will now likely fall to zero as consumers won't

be willing to pay more for cocoa that complies with a law that

has been pushed back.

That will leave the processors and chocolate-makers unable

to pass on the cost and forced to absorb it.

"There's real world implications to this. Whoever agreed to

buy and pay that premium paid for nothing," said a Europe-based

cocoa trader.

Research published last month by Fefac, an EU animal feed

industry body, estimated that EUDR compliant soybeans would cost

5-10% above regular beans.

Fefac, EU farmers lobby Copa-Cogeca, and various other

EUDR-impacted industries welcomed the delay proposal, having

previously warned that implementing the rules on time would

result in many small businesses suffering.

The EUDR will require importers of commodities to prove

their goods weren't grown on land deforested anywhere in the

world, or face fines of up to 20% of their turnover.

The law requires companies map and trace their supply chains

down to the plot where their raw materials were grown.

Critics said the measure is too complex as supply chains

involve millions of farms and multiple intermediaries whose data

is often difficult to obtain or verify.

The Commission's delay proposal still needs to be approved

by the European Parliament and member states.

The majority of members asked Brussels in March to scale

back and possibly suspend the law while parliament members who

oppose the delay do not have a majority.

The Commission said the vote would likely happen in November

or December at the latest.