By Maytaal Angel

LONDON, June 11 (Reuters) - The European Union is

ill-prepared to implement the bloc's new law aimed at banning

the import of commodities and related goods linked to

deforestation, an EU grain trade association said on Tuesday.

The law, which comes into effect end-December, requires

importers of coffee, cocoa, beef, soy, rubber, timber and palm

oil to prove their supply chains aren't contributing to

deforestation anywhere in the world, or be fined up to 4% of

their turnover inside the EU.

The rules apply equally to European farmers, who will be

banned from exporting products cultivated on deforested land.

The head of grain trade group Coceral, Iliana Axiotiades,

said both the European Commission and European member state

authorities in charge of implementing the European Union

Deforestation Regulation (EUDR) are not ready.

"Even the information system, the IT the industry will need

to feed (information into) is not ready," Axiotiades told

delegates at an International Grains Council (IGC) conference in

London.

Asked whether the landmark legislation, which in time could

reshape global commodity markets, will be delayed, Axiotiades

said: "I believe a decision will be made to take into account

the lack of preparation".

In March, some 20 EU members asked Brussels to scale back

and possibly suspend the EUDR, saying the policy would harm

farmers.

EU leaders have watered down numerous environmental measures

in an attempt to quell months of protests by angry farmers over

issues including EU green policies and cheap imports.

Producing countries from Indonesia to Brazil have also

criticised the law, saying it is discriminatory and that the new

rules could end up excluding vulnerable, small-scale farmers

from accessing the EU's lucrative market.

Their fear is that farmers in remote, rural regions might,

for example, be unable to provide buyers of their goods with

geolocation co-ordinates to prove their farms are not on land

deforested after 2020 - one of the law's key requirements.

Commodity traders and consumer goods companies like JDE

Peet's, one of the world's largest coffee companies,

have meanwhile expressed concern their industry will not be able

to meet the law's requirements on time.

(Reporting by Maytaal Angel; Editing by Ros Russell)