News: North Asia
USSEC conducted the 15th U.S. Soy Trade Price Risk Management Training on April 25 and 26 in Shanghai, China. Susan Sutherland of USSEC member CME / Chicago Board of Trade (CBOT) and Bell Chen from USSEC member R. J. O’Brien provided training to a total of 45 trainees, soymeal sales managers from top U.S. soybean importing companies or soybean meal purchasing managers from top U.S. soybean importers’ preferred customer feed millers. USSEC Country Director – China Xiaoping Zhang participated in this activity and promoted the U.S. Soy Sustainability Assurance Protocol (SSAP) and the U.S. Soy Advantage, particularly amino acid profile, to the audience during his opening and closing remarks.
In the soybean meal business, basis contract is becoming more popular, which has closely tied soybean meal sales and purchases with futures markets on the Dalian Commodity Exchange (DCE) and CME/CBOT. Just recently, DCE launched the first futures option contract in China’s futures trading history, i.e. options on soybean meal futures. Such market and risk management tools are so new to the majority of the feed industry that the timing is right to provide training on elementary futures trading to the industry. Additionally, an overall market outlook and case study were provided to the audience to help them better understand different market influencing factors, and hands-on practices were provided through a simulation for the audience to enhance their knowledge and skills of price risk management tools and economic effects. The audience regarded the evaluation and discussion of the strategies they used during different pricing stages in the simulation to be very valuable.
As in previous years, this program received strong support from CME/CBOT by recommending professional trainers and training materials. Tina Liao, director of client development and sales, based in Singapore, traveled to this event and provided assistance in educating the audience on futures and options basics.
USSEC Marketing Program Manager – China Yantian Zeng and Marketing Program Assistant Binbin Du organized the program and similar previous programs, which have all been well received by participants.
USSEC China was granted non-governmental organization (NGO) licenses on April 1 by the Chinese NGO authority overseeing foreign nongovernmental organizations operating in mainland China, placing USSEC’s Beijing and Shanghai representative offices among the first group of foreign NGO offices to be recognized by the Chinese government for their long-term contribution to the nation’s wellbeing and compliance with the recently-enacted law on foreign NGOs.
Two foreign NGO license handover ceremonies took place in Beijing and Shanghai simultaneously. Licenses were presented to foreign-NGO representatives by senior officials from the Chinese Ministry of Public Security and the municipal NGO offices in recognition for their dedication to bilateral trade, charity, science, education, and health care and compliance with the registration requirement stipulated in China’s Foreign NGOs Management Law, which was enacted in 2016 and came into effect in 2017.
Paul Burke, USSEC Regional Director – North Asia, was greeted by Hao Yunhong, head of the NGO office of the Ministry of Public Security, who handed him the NGO license for USSEC’s Beijing representative office during the ceremony. Mr. Hao said that USSEC had been highly cooperative throughout the registration process, making the work of the NGO office much easier. Mr. Burke said USSEC would like to do what it can to make sure that it operates in China in compliance with the Chinese law.
During an interview after the ceremony, Mr. Burke told Phoenix TV that USSEC, under the new foreign NGO law, would continue to operate in China as normal, and its activities would not be negatively affected.
Under the foreign NGO law of China, foreign NGOs are required to register with the police for their existing representative offices to be officially recognized as legal entities conducting activities in mainland China.
USSEC China co-sponsored the 2017 Hebei Feed Industry Development Summit held on March 18 and 19. Approximately one thousand representatives from China’s feed mills, integrators and animal production farms participated in the event.
During the summit, Paul Burke, USSEC Regional Director -North Asia, delivered a presentation on soybean supply and demand, and the advantages and sustainability of U.S. Soy. Soybean customers expressed much interest and asked questions on the global soybean price trends, and the safety of GMO products, among other topics.
Dr. Richard Han, USSEC Technical Director – Animal Utilization (AU), China; Yantian Zeng, USSEC Marketing Program Manager; and Sunny Zhang, USSEC AU Program Manager, also attended this summit, helping promote U.S. Soy and communicating with customers at the USSEC booth.
USSEC China led a delegation of twenty to participate in the 2017 Poultry Production Training Session in Raleigh, North Carolina from March 4 – 12. The delegation was comprised of representatives from China’s poultry integrators, feed mills, and poultry farms.
During the training session organized by USSEC, the delegation visited Cargill Grain Crushing Plant, Strickland Farm, and a Perdue chicken farm. They also trained at North Carolina State University on poultry management, housing and equipment, intestinal health, and quality assurance programs.
USSEC China Animal Utilization (AU) Director Dr. Richard Han and AU Program Manager Sunny Zhang escorted the delegation. Dr. Han delivered a briefing on the sustainability of U.S. Soy and USSEC activities.
USSEC held the Japan Swine Nutrition Course at the IGP Institute at Kansas State University in Manhattan, Kansas from March 6-9. Japan is one of the top pork importers in the world, and participants attended specialized training in swine nutrition and feed manufacturing programs.
During the course, participants learned about numerous nutrition components and requirements, as well as feed manufacturing through workshops, lectures, and field trips. Participants were invited and sponsored by USSEC to gain their knowledge of both subjects of feed manufacturing and swine nutrition.
“This course has been organized by USSEC, but was funded by the Kansas Soybean Commission, where this year they have helped us bring in eight Japanese participants,” explained Carlos Campabadal, course coordinator and IGP’s feed manufacturing and grain management curriculum manager.
“I really enjoyed learning about new areas in swine nutrition in this course, and I can take back to my job all of the concepts of nutrition, which is a new idea I can share with my company,” said course participant, Mayumi Fukushima, farm manager at Japan Farm in Japan. Ms. Fukushima explains that she is also very satisfied with the course material that she learned and then traveling to the commercial swine farm and applying the information to a visual perspective of learning.
“It is a very good course for participants to learn about feed manufacturing techniques for swine one day, basic swine nutrition another day, and then taking a trip to visit commercial feed mills and a grain and soybean export facility, seeing how soybeans are exported in truck containers,” stated Mr. Campabadal.
As a part of special series of projects for the U.S. Soy Industry’s 60th Anniversary in Japan, USSEC organized a dialogue with the U.S. Embassy – Tokyo to discuss U.S. Soy Sustainability and women’s empowerment, concentrating on the program focusing on Japanese women in the soy industry and creating preference and differentiating the U.S. Soy Advantage across the entire value chain.
USSEC North Asia Regional Human Utilization (HU) Coordinator and Japan HU Director Masako Masi Tateishi invited Rachel Nelson, U.S. Embassy Tokyo Agricultural Trade Office (ATO) Director, to an interview-style meeting, facilitated by the Japanese business and economics newspaper Nikkei, which covered the story in its popular section, “Marunouchi Career Academy” during its evening January 30 issue. The section organizes various enlightenment activities such as promotional events, seminars, and dialogues in Japan to connect business professionals and companies for the purpose of career empowerment.
The U.S. Soy dialogue included efforts made through cooperation between the Foreign Agriculture Service (FAS) Tokyo and USSEC, plus the U.S. Department of Agriculture’s (USDA) Women in Agriculture program to introduce how the U.S. agriculture industry enhances and supports women’s careers in agricultural industries. USSEC also provided an assessment of the current status of the Japanese soybean industry as it pertains to women.
Ms. Nelson and Ms. Tateishi were nominated to serve on the judges’ panel for the national natto competition to be held in Kyoto, Japan on February 24. USSEC will continue to collaborate with FAS Tokyo on the topic of sustainability in the U.S. and Japanese soybean industries.
USSEC participated in the 11th China International Oils and Oilseeds Conference in south China’s Guangzhou City on November 9. American Soybean Association (ASA) director Sam Butler served as one of the panelists to discuss U.S. soybean production, soybean price trends, and the oils and oilseeds market.
The insights brought by domestic and international guest speakers attracted more than 1,000 participants to the event, including all of U.S. Soy’s key local customers and many of their downstream feed traders and dealers. The presentations delivered by U.S. soybean growers providing the latest soybean production information in the U.S. and elaborating on U.S. farmers’ marketing strategies were well received by the audience and the organizers. U.S. soybean growers presented the methods and techniques used in U.S. sustainable agriculture and reassured the Chinese audience, especially the end users, of the present and future reliability and sustainability of the U.S. soybean supply.
After the conference, Mr. Butler travelled to south China’s Guangxi province to visit two local customers, including Great Ocean Oils & Grains Industries (Fangchenggang) Co., Ltd., of Yihai Kerry Group and Huiyu Grains and Oils Industry Co., Ltd., of Jiusan Group (Huiyu Company) in Fangchenggang city. He discussed U.S. soybean production and quality in 2015 and 2016 with executives from the two local oil producers and stressed that amino acids are a better measure to evaluate the protein profile. Xiaoping Zhang, USSEC Country Director – China; Dr. Richard Han, USSEC Technical Director – Animal Utilization; and Yantian Zeng, USSEC Marketing Program Manager, escorted Mr. Butler on the two-day trip.
The China International Oils and Oilseeds Conference is an annual event jointly organized by Dalian Commodity Exchange (DCE) and Bursa Malaysia since 2006. The conference provides industry professionals with the latest oils and oilseeds information across a wide spectrum including production, processing and market outlook, among others. USSEC has sponsored this conference for more than 8 years.
USSEC recently participated in the 57th Japanese Vegetable Oil Industry New Year Event, kicking off 2017. Japan Oilseed Processors Association (JOPA), Japan Rice Bran Oil Industry Association, Japan Margarine Industry Association, Japan Oil & Fat Importers & Exporters Association, Japan Oil & Fat Wholesalers’ Association, and Japan Mayonnaise Manufacturers’ Association jointly organized this event. Nearly 500 particpants, ranging from oil manufacturers, wholesalers, traders, governments, and other relevant industries, attended this large event to pledge further progress of the Japanese vegetable oil industry together.
USSEC Country Director – Japan Mitsuyuki Nishimura, and Masako Tateishi, USSEC North Asia Regional Human Utilization Coordinator and HU Director – Japan represented the U.S. Soy industry.
During a congratulatory speech made by Takao Imamura, chairman of JOPA, and president and representative director of Nisshin Oillio Group, several important matters were noted as to what the Japanese vegetable oil industry needs to promptly prepare in order to respond to possible changes in external environments in 2017, including the next U.S. president’s plan to withdraw from the Trans Pacific Partnership (TPP) and a possible transition to direct discussion, an evaluation plan of mandatory country of origin labeling for all Japanese processed foods, and a plan for mandatory implementation of Hazard Analysis Critical Control Point (HACCP) for food safety in Japan. Mr. Imamura also stressed the importance of further growing vegetable oil and sustainability demands throughout the industry because a vital food source is necessary in order for all generations to maintain health and to adjust proper physical function.
During a conversation between JOPA, USSEC, and the Foreign Agricultural Services (FAS) Tokyo team during the reception, the executive director of JOPA, Akira Saito, said, ”One of JOPA’s goals for 2017 is to restore soybean oil demands so that we are going to further consolidate our U.S. – Japan partnership. Let’s take a group photo to pledge such cooperation!!”
In 2015, Japan imported over 3.24 million metric tons (MT) of soybeans, of which U.S. enjoys a 72 percent market share. USSEC Japan will continue to work with the Japanese vegetable oil and soyfoods industries, both of which are essential ingredients for Japanese foods.
USSEC’s partnership activities with the U.S. Department of Agriculture (USDA) paid off this year when Korea’s largest trade organization of food-grade soybean end-users announced they would require the U.S. Soybean Sustainability Protocol (SSAP) certificate. In its March 2016 tender announcement for 7,651 metric tons (MT) of U.S. non-GMO identity preserved soybeans, the Korea Federation of Tofu Cooperatives (KFTC) added the certificates to the list of documents suppliers must provide.
Wisconsin-headquartered DeLong Company, as well as Knewtson Soy Products in Minnesota, both USSEC members, are two of the 45 companies spanning 17 states that are pre-registered to use SSAP certificates.
DeLong’s Brandon Bickham, a USSEC director, says, “We are using the SSAP in Japan, Taiwan, Korea, and Vietnam as a marketing tool from our side and at our customers’ request in some instances.”
“The large customers seem to want everything that is available to them for advertising and food safety image,” says Wayne Knewtson, president of Knewtson Soy Products.
Launched in 2013, the SSAP allows U.S. exporters to efficiently and cost-effectively communicate the sustainability of U.S. Soy to buyers worldwide. In January 2016, soy exports certified through the SSAP hit a record two million metric tons in the 2015/16 marketing year. The SSAP provides U.S. Soy exporters with proof of, among other sustainability-related criteria, reductions in energy use, greenhouse gas emissions, and soil erosion of soybeans produced in the United States.
USSEC’s Market Access Program (MAP) – funded efforts include bringing a team of Korean soybean crushing and feed mill buyers to the United States to learn about the superior quality of U.S. soybeans as well as their sustainability. With USDA Foreign Market Development (FMD) funds, USSEC staff also conducts seminars and other trade servicing activities in North Asia and other locations where they highlight the sustainability of U.S. Soy.
USSEC traveled to northeastern China’s soy-growing province of Heilongjiang to hold workshops and exchange market information with local soy growers on December 13 and 14.
Three experts including Chen Beier, senior vice president of R. J. O’Brien’s Asia department; Hanver Li, chairman of Shanghai JC Intelligence; and Liu Zhaofu, founder and general manager of the soy portal website Dadou.cn, were invited by USSEC to speak to local soybean growers in the snow-covered Nenjiang county of Heilongjiang province.
The USSEC team was received by Li Tiehui, deputy chief of the agricultural authority of Nenjiang County, who escorted the team to a local cooperative farm on December 13 and an agricultural technology service center on the 14th.
In the workshops, Nenjiang soy growers shared with USSEC their concerns over market uncertainties, increased competition from domestic soy growers from other parts of the country, and soybean price drops. Some expressed pessimism over the short-term future. In response to their concerns, USSEC consultants not only delivered presentations to introduce some of the U.S. soybean industry’s experience and practice in dealing with the challenges and problems which are common to soy growers from all over the world, but also shared some practical industry-leading techniques in analyzing the soybean market and predicting future trends.
One soy grower shared his personal experience of rushing into the options market ten years ago without sufficient knowledge to guide his way, only to suffer a loss of five million renminbi (RMB) in a rash attempt. USSEC consultant Bell Chen, a seasoned options trading professional from the oldest and largest independent futures brokerage and clearing firm in the U.S., encouraged him to start from the basics and pay particular attention to the most up-to-date techniques necessary to calculate the odds and reduce risks.
In his closing remarks, Mr. Li said he would like to express gratitude on behalf of the Nenjiang government to USSEC for its continued contribution to the local economy through sharing some of the U.S. soybean industry’s best practices, and offering local soy growers ready-to-use practical knowledge in protecting themselves against market volatility.
It’s no secret that China’s domestic soybean production has been declining since 2004/05, due to a change in their corn price support policy. Since then, China’s soybean import volume has been increasing to meet the growing demand from the crushing industry to supply the needs for soybean meal and soy oil. But an exciting new export development is China’s growing need for specialty soybeans for use in making soy foods and beverages.
Unlike in the U.S., essentially all of China’s domestic soybean production are non-GMO beans and nearly all are used to make food and beverages. Last year, China grew approximately 10.51 million metric tons (MMT) of soybeans. They are projected to increase production 11 percent this year. An impressive increase, but it’s not going to be enough. This year, demand for non-GMO soybeans for food use in China could exceed their country’s domestic production by over 20%. Essentially, China is projected to consume specialty soybean tonnage roughly equal to Iowa’s total 2015 soybean production. Enter – an opportunity for U.S. specialty soybean exporters.
Last year, China had a shortage and imported specialty soybeans from Canada and Russia to fill their food ingredient market gap. And that didn’t go unnoticed. In response to U.S. exporter feedback, USSEC funded a 2017 China Food Bean Export Initiative project, which included holding a U.S. Specialty Soybean Market Outlook Conference in Hangzhou, a city in the province of Zhejiang in eastern China on November 21. During the conference, USSEC China presented the 2016 U.S. Soy food bean quality survey report, and updated conference attendees on the current situation of the U.S. and Chinese non-GMO soybean supply and demand, and shared insights on China’s soy food industry future trends.
USSEC exporter members SunOpta and Grain Millers sent their China representatives to attend and speak at the conference, introducing their companies’ specialty soybean portfolios and supply capabilities. Both organizations assured the attendees that U.S. exporters could meet the Chinese customers’ demand by producing suitable varieties of soybeans backed with reliable and consistent quality and timely delivery.
Over the previous several months, USSEC’s staff in China had also made one-on-one industry visits to assess the U.S. specialty soybean food market opportunity in eastern and northern China. Work to expand U.S. soybean sales to China will continue throughout this year by connecting U.S. specialty soybean exporters with the Chinese soy food and beverage industry.
USSEC China hosted its annual trade policy workshop in Beijing on December 15. Representatives from USSEC’s valued partners, customers and supporters were invited to attend the event.
More than 40 representatives from government agencies, industry associations, and member companies attended the trade policy workshop. Among them was Mr. Bian Zhenhu, president of China Chamber of Commerce of Native Foodstuffs and Produce; Mr. Bruce Zanin, minister counselor of Agricultural Affairs at U.S. Embassy in Beijing,; and Mr. Qie Jianwei, vice president of China National Association of Grain Sector. Most of the representatives have over the last few years not only met with U.S. soybean farmers who provide leadership to USSEC’s programs in China, but also worked closely with USSEC on many of these programs to help advance the interest of both US soybean farmers and Chinese buyers. They have offered USSEC unfailing support throughout the latter’s presence in the country, especially during times of uncertainty.
PowerPoint presentations were delivered by three guests speakers including Ms. Fang Yan, former official from China’s National Development and Research Commission; Mr. Chen Beier, senior vice president of R. J. O’Brien’s Asia department; and Mr. Hanver Li, Chairman of Shanghai JC Intelligence. Their topics ranged from the overall situation of the Chinese economy, and the national policy of the “supply-side reform”, to the “Belt and Road Initiative”, and China’s foreign reserves. Their presentations received positive responses from the audience who interacted with the speakers on many of the issues covered. Roseanne Freese, U.S. Agricultural Consul based in northeastern China’s Shenyang, said that she felt heartened by the fact that USSEC was able to invite so many industry experts and government officials to come to the workshop and be actively involved in the discussions.
To wrap up the workshop, Mr. Zhang Xiaoping, USSEC’s Country Director – China, said that USSEC and all its valued China partners would carry on moving forward with all of the work that they have been doing to serve the interest of China, the U.S. and the world.
It’s not a one-off. It’s a long-term mutually beneficial process. That’s what we call partnership.
– Zhang Xiaoping, USSEC Country Director – China
A New Year’s reception was hosted after the workshop, with 120 guests including the 40 workshop attendees and 80 representatives from customer companies invited in appreciation for their long-term support.
Whatever uncertainties we face now or in the future, the U.S. soybean farmers and the U.S. soybean industry will remain committed to our valued partners here in China.
-Paul Burke, USSEC Regional Director – North Asia
After the event, some guests congratulated USSEC on successfully hosting this annual activity, calling it “a great event.”