U.S. soybean industry hopes to double exports to Pakistan, Bangladesh

28 Feb 2020 2:30 PM
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As the continuing future of trade with China remains uncertain, America's soybean industry has determined two countries with which it hopes to improve trade -- Pakistan and Bangladesh.

"Five years back, [these countries] didn't import an individual soybean," said Jeff Jorgenson, an Iowa soybean farmer and the president-elect of the Iowa Soybean Association.

"And today, five years later, Pakistan imports about 2.5 million metric tons and Bangladesh imports about 1 million metric tons a year."

The sudden spike in demand originates from the nations' nascent -- and quickly growing -- animal agricultural industries.

The countries are slowly gaining political and economical stability, which is making the persons wealthier, said Grant Kimberley, the senior director of market development for the Iowa Soybean Association. One of the early things persons do for the reason that situation is add more animal foods with their diets.

American soybeans are used mostly to feed livestock and fish.

"We think imports to those two countries could easily double within five to seven years," Kimberley said. "That might be pretty significant. They could enter our top 10 markets."
 
To propel that growth, the U.S. Soybean Export Council is dealing with companies in those nations to boost their farm and feeding technologies, Kimberley said. The council, along with members of the Iowa Soybean Association, conducted a trade mission to the spot last week.

There, they also discussed launching in-country campaigns touting the great things about animal protein over that of plants. Such campaigns could be accompanied by tutorials about different ways to prepare chicken and fish.

"We're not merely over there shaking hands and meeting people," Kimberley said. "We have persons over there helping them grow their market, because which will grow our market, also."
 
Such growth is desperately had a need to get started to fill the gap popular left by China, Jorgenson said.

Prior to the trade war began, China was the leading buyer of American beans, importing about thirty percent of all soy grown in the usa.

When the Trump administration levied vast amounts of dollars in tariffs on Chinese goods in summer 2018, China responded with its own tariffs, many fond of agricultural goods like soybeans.

Its appetite for American soybeans plummeted, together with the price of U.S. soy. And, though the nation has made some sporadic purchases in the 18 months because the trade war began, the marketplace has not recovered.

"What it all boils right down to is, we need to find, as best we can, a replacement for China," Jorgenson said. "We have a whole lot of product that people need to get sold."

It might be impossible, though, to fully replace China, Kimberley said.

In 2017, the entire year before the trade war began, China imported 36.5 metric a great deal of American soy, Kimberley said. The following year, their imports shrank to 27 million metric tons. And in 2019, the country imported only 13.

"However they were still our No. 1 buyer of soybeans, even with that," Grant said. "That is why you merely can't replace China."

Farmers and industry leaders are hopeful they will not have to. With the January signing of the phase 1 trade deal, China promised to radically increase its purchases of American agricultural goods.

The deal, however, is carefully worded to state that China will buy U.S. agricultural products "based on commercial considerations." Also, China has yet to eliminate the bulk of the retaliatory tariffs in place on American agricultural goods.

Brazil, America's number 1 soybean competitor, is beginning its total annual harvest, which means South American beans are about to flood the market. Those beans will be cheaper than America's soy -- regardless if the tariff on U.S. beans is removed.