USSEC (U.S Soybean Export Council) is well known for driving significant industry changes across the world by working collaboratively with customers in the soy value chain. It recently hosted the Qualified State Soybean Board (QSSBs) Mission to the Asia Subcontinent (ASC). QSSB is a volunteer farmer-leaders group responsible for marketing, research and commercialization programs in present and prospective markets for soybean consumption in various industries. Think Grain Think Feed got an opportunity to interact with the delegation to know about their learning, experiences in the ASC region including the perspectives of this market, and to know further viewpoint of experts from Asian Region. The main objective of this mission was to understand market behavior in Asian Subcontinent, rather its constraints and opportunities.
The QSSB mission to the Asia Subcontinent (ASC) from July 29 to August 6, included formal interactions with industry leaders from Sri Lanka, Bangladesh and India, and field activities for a greater understanding about the differences and similarities among the markets in these three countries.
Opportunities & Potential in Sri Lanka Market
In its first activity in Sri Lanka, the QSSB team met Sri Lankan industry players and also visited a feed mill, layer farms, broiler farms, and chicken outlets. The team inspected stocks of U.S soy meal at the feed mill and discussed how trade and tech aspects could be better addressed in future. About 55 participants attended “Lanka – U.S. Soy Alliance,” a trade networking meeting where two leading industry members discussed the Sri Lankan industry’s progress and growth.
USSEC CEO Jim Sutter emphasized and assured USSEC’s and the U.S. Soy industry’s support to the Sri Lankan industry. He compared Sri Lanka’s market to India’s and said that Iowa is 2.2 times the size of Sri Lanka. He said that the U.S. currently has a significant market share in Sri Lanka which is expected to grow.
Industry representatives shared that per capita consumption of chicken in Sri Lanka touched close to 10 kg. By contrasting many small “mom and pop” grocery stores, the delegation had the opportunity to compare modern retailing and customer preferences to various food and grocery products. 95 percent of the country’s poultry industry relies on processed, chilled and/or frozen chicken.
Bangladesh: Price is still a concern
Next, USSEC’s QSSB mission landed in Kolkata to meet who’s who of Bangladesh industry, including Moshiur Rehman, the managing director of the Paragon Group. Five Indian crushers / soy traders also met the QSSB team and learned about developments taking place in Bangladesh. Interestingly Dr. Vijay Anand (Deputy Regional Director of USSEC for the ASC region) noted that Bangladesh accounted for 95% share for the U.S of the total soybean imported into the country in 2015.
The mission visited Hi-Tech feed mill and learned about poultry growth and consumer demand in East India, also noted that there is plenty of room for growth as the per capita consumption of chicken in India is still very low.
About 33 participants attended the “Bangla-U.S Soy Alliance” in Kolkata, which was an exclusive interactive session with the Bangladesh feed industry. There will soon be four crush plants and several full fat soybean meal (FFSBM) production units, which will add to more of the U.S whole bean consumption in Bangladesh.
Mr. Rehman stressed that it was more important to conduct in-country activities to demonstrate technologies to the Bangladeshi people in order to reach technologies and knowledge to their country people.
Kazi Hassan, a key industry leader managing the Kazi group, gave his positive impressions on U.S. Soy and mentioned that his group would need some assistance on how to improve their port’ infrastructure to handle bulk as well as containerized shipments.
Delhi: Interaction with food & feed industry
The QSSB team attended a reception hosted by Scott Sindelar, Minister Counselor of Agricultural Affairs, Foreign Agriculture Services (FAS)/U.S. Department of Agriculture (USDA), Embassy of the United States, New Delhi at his residence. About 65 participants attended the event, including ADM, Cargill, Poultry Federation of India, U.S. Grains Council (USGC), and U.S food grade soybean importers.
In Delhi, the team was taken to McDonalds for lunch, which provided them an insight on changing food preferences of customers, trends with the young population in India, and price comparisons.
On the last day of the mission, Mr. Sindelar and his team welcomed the group to the embassy, and presented USDA’s perspectives on the Indian market. He stressed that it pays to be patient to be able to derive benefits from the Indian market.
USSEC made two presentations to the QSSB group, one of the presentations focused on the market assessment recently put together for the ASC region. The second presentation centered on ASC’s program management, mission and goals; return on investment (ROI) for dollars invested, and how the funds are distributed against projects/activities among other topics.
The Iowa soybean group was especially glad to note that initiatives were taken to send an Indian government delegation to the Farm Progress Show in Boone, Iowa on August 31 and September 1. Drew Klein, Regional Representative – ASC will accompany the team once they reach the U.S.
Asian Experts’ Perspective on Asian Subcontinent market
Dr. P.E Vijay Anand, USSEC said that there is much international focus onto ASC region especially due to its emerging status as a favorable, developing destination for various commodities and products. He provided following market update/assessment which was based on the USDA data as of February 2016 and U.S soy import figures were updated into ASC as of June 2016.
World’s soy meal dependence increased by 24.63 million tons between 2011/12 and 2014/15 and the corresponding increment for the Asia Subcontinent (ASC) is 2.60 million tons. The change percentage for the former is 13.84 % while for the later it is 57.01% indicating that the change is very rapid in the ASC region. The change that is about 4.0 times higher is indicative of increasing demand and rapidly developing industries that need more soy meal as a consistent protein source in the ASC. The forecast for soy meal utilization in the ASC is 8.69 MMT by 2015/16 as per USDA. To produce this meal about 10.66 MMT of soybeans are required.
The consumption front in the region has been driving a significant demand for soy meal in between 2010 and 2015. India’s neighboring countries (Pakistan, Bangladesh, Sri Lanka and Nepal) show the highest change in their meal consumption pattern during the same corresponding period with a + 101.18 %. India’s internal consumption also shows a positive change of +39.69%. These two positive changes put ASC on a consumption spot light and thus are attracting attention from other countries.
Since the past five years, there has been a steady growth of U.S soy imports into Bangladesh, Sri Lanka and more recently (from 2015) into Pakistan and Nepal. A total of 394,000 MT of U.S soy meal valued at $ 213 million has been imported in the last three years. On the same lines 1.13 million tons of U.S soybeans have been imported into India’s neighboring countries in the past three years.
Import trends for U.S soy continue into Bangladesh, Pakistan, Sri Lanka and Nepal even in the current oil year (October 2015-September 2016). With three more months to go, the ASC region has already imported 799,268 MT of U.S soybeans and 253,247 MT of U.S soy meal into the region.
Interestingly Bangladesh, Pakistan and Nepal which were initially meal markets have now turned into soybean markets while Sri Lanka is a steady meal market. Countries that are rapidly taking to soybean crushing perhaps realize that demand for protein and energy (oil) is the need of the hour to support nutritional security for their population. For the first time, India also imported corn and soy meal in 2015/16 as Indian meal was out priced as compared to international prices. Indian demand for soy meal is bound to grow as the poultry, aquaculture and human consumption sectors grow.
Mr. Shabbir Ahmad Khan, another expert from Indian Poultry industry shared about historical relations between Indian industry and US Agriculture industry which started way back in 1967, when two grandparent stocks were imported from US and Canada.
In 1980’s USSEC started to conduct various seminars to teach the industry about the usage of soy meal in poultry feed which started at 10% inclusion and soon reached 25-35%.
Since starting its office in 1996, USSEC invested lots of funds to educate the industry about the usage and benefits of SBM in Poultry, dairy, fish and food sector. As they believe that Indian industry is a mighty one and will surely recognize the benefits.
Looking at the present scenario of industry, GOI may consider to import SBM to address raw material security, sustained supply and price corrections and thus saving the livestock industry of the country.
A huge credit of the success story of Indian Poultry sector goes to these international experts who invested their time and money. I really hope that both the countries will mutually benefit from each other in near future.