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News: Asia Subcontinent

Soybean Meal Imports Recorded on Exempted List for Customs Duty in Sri Lanka

Monday, March 27, 2017
Category Animal Utilization Asia Subcontinent General News 
In Sri Lanka, USSEC has had two significant landmarks that helped obtain market access for U.S. Soy: the acceptance of genetically modified (GM) soybean meal for use in…

In Sri Lanka, USSEC has had two significant landmarks that helped obtain market access for U.S. Soy: the acceptance of genetically modified (GM) soybean meal for use in animal feeds and a zero customs tariff for imports.

In 2008, Dr. Athula Mahamage was appointed as USSEC’s Sri Lanka country representative and his concerted efforts with local influencers and policy makers helped lead to these accomplishments. As a result of this and the continued tech and trade efforts by Dr. Athula, the U.S. Soy industry has enjoyed a steady increase in the soybean meal market share in Sri Lanka. The country imported about 220,000 metric tons (MT) of soy meal in 2015/16, of which 70 percent is U.S. soybean meal.

However, markets change, policies get altered, and government rules are amended. Caught in one such transformation was the reversal of customs duty on soybean meal that was notified by the Sri Lankan Government in November 2016. The duty, which was set at 15 percent, put Dr. Athula and his team (members of the animal husbandry, finance ministry, and trade associations in the livestock and poultry industry) on alert. They worked strategically to bring the duty down to 5 percent in December 2016. As a next step, the team convinced the authorities at the finance ministry on the importance of soybean meal, which supports a growing poultry/animal feed industry in the country and has successfully gotten soybean meal listed in the Gazette Notification as an “exempted item” for customs duty. Competitiveness for U.S. soybean meal entering Sri Lanka was hampered slightly but has been successfully restored back to its original state.

Market access is a priority area for USSEC’s global market reach. Constraints of different natures exist in different countries and some issues may even crop up from nowhere like the one cited here. Continued efforts in this area ensure markets for U.S. Soy.

Extract from the Extraordinary Gazette showing the list of items exempted from customs duty

Sri Lankan customs departmental order communicating duty exemptions

USSEC Attends PEOC 17, Makes Customer Visits to Pakistan

Monday, February 6, 2017
Category Animal Utilization Asia Subcontinent General News Soy Foods 
USSEC recently attended the Pakistan Edible Oils Conference (PEOC) and visited customers in Pakistan, in addition to holding Asia Subcontinent (ASC) staff planning…

USSEC recently attended the Pakistan Edible Oils Conference (PEOC) and visited customers in Pakistan, in addition to holding Asia Subcontinent (ASC) staff planning meetings in India.

USSEC CEO Jim Sutter and USSEC
 Acting ASC Regional Lead and Marketing Director – Animal Nutrition Pam Helmsing traveled to New Delhi and Agra, India and Karachi and Lahore, Pakistan from January 13 – 26. During that time, they met with customers and potential customers of U.S. Soy in Pakistan to hear about their markets and concerns and talk about the value 
of U.S. Soy; Mr. Sutter spoke at the PEOC event; and they worked with the ASC team to plan for the execution of existing and future programs.

Mr. Sutter addressed approximately 500 attendees at PEOC, speaking
about the value and sustainability of U.S. Soy. 
After the PEOC event, meetings with Pakistani crushers and feed mills took place.

USSEC’s plans in Pakistan include: technical training for the solvent extractor industry; nutritional expertise for the poultry industry; possible assistance with demand building for poultry, 
including nutritional information and countering junk 
science that says poultry is harmful; possible U.S. Soy oil promotion assistance to position soy 
oil as a premium brand; and the possibility of bringing a group to Kansas State University for soybean procurement training through a U.S. Department of Agriculture (USDA) Cochran grant.

Palm and canola currently dominate the oil market in Pakistan, although soybean imports for crush have increased dramatically. The industry recognizes that oil produced with U.S. Soy is lighter in color and has a lower cost of processing than soy from South America. There continues to be a preference for canola and palm, however, because of higher oil contents and consumer preference. Pakistani crushers are very price sensitive. They admit that they are unable to take U.S. Soy and produce as high a quality of soybean meal as can be imported from the U.S. and are anxious to learn how to improve their processes to do so.

Because purchases of soy by individual companies are rather small, purchases are usually made with multiple consignors. This means competitors are getting the same quality at the same price at the same time, which leads to consensus opinions about the quality and/or issues with product from a given country or supplier. This is true for both soybean meal and whole beans. The industry is moving toward some bulk handling.

The feed industry also recognizes the difference in quality between U.S. soybean meal and meal produced locally from U.S. beans. They note that the quality is improving. The feed industry is sophisticated and recognizes the value of U.S. Soy, both intrinsic and extrinsic advantages, and is looking for ways to calculate what premium they can afford to pay for U.S. origin.

The poultry industry has been growing at a rate of eight to ten percent yearly, but there are some plateau years. Profitability is low, with chicken at about two-thirds the price of lentils. The two major barriers to growth in chicken consumption are poverty and misinformation about the quality of poultry meat. The Pakistan Poultry Association is planning a feeding program at a few public schools, providing eggs and chicken legs to children and will collect data to show improvements in health, school attendance and learning.