News: North Asia
A Taiwanese delegation in Washington, D.C., signed a letter of intent on September 16 with USSEC committing to purchase between 2.6 and 2.9 million metric tons of soybeans valued between $1.13 and $1.26 billion U.S. dollars by 2017, as part of the Taiwanese Agricultural Goodwill Mission. The letter is evidence of Taiwan’s commitment to strengthening trade ties and maintaining the well-established trade partnership between the United States and Taiwan.
In 2014, Taiwan was the fifth largest market for U.S. soybeans, importing 1.3 million metric tons of U.S. soy, which represented a 55 percent market share. Taiwan imports more than 1.15 million metric tons of U.S. soybeans annually, valued between $600 and $720 million U.S. dollars. From January to June 2015, Taiwan imported nearly a million metric tons of U.S. soybeans valued at $442 million U.S. dollars.
“Taiwan has been a loyal, long-term partner of U.S. Soy for more than 40 years,” said USSEC Chairman Laura Foell. “The Taiwan Goodwill Mission helps the U.S. and Taiwanese government officials, traders and end-users to keep the lines of communication open, which is so important to maintaining our great relationship with this valuable buyer.”
While in Washington, members of the mission met with USSEC, the U.S. Grains Council, U.S. Wheat Associates, the North American Export Grain Association and the National Grain and Feed Association, as well as U.S. government officials. The mission delegates also signed letters of intent to purchase U.S. soybeans, wheat and co-products with USSEC and the U.S. Wheat Associates.
Following the signing ceremony at the U.S. Capitol complex, members of the Taiwanese delegation will tour the U.S. Grain Belt to see U.S. farms and grain elevators firsthand. They will meet with government officials, farmers, agriculture groups and other important international organizations in Iowa, Illinois, Kentucky and Minnesota.
The biennial Goodwill Mission has been organized by Taiwan’s Ministry of Foreign Affairs (MOFA) since 1998. USSEC’s participation in the mission is an important part of its work to continue Taiwan’s preference for U.S. soybeans.
USSEC hosted the 2015 soybean crushing workshop in Pyongchang, South Korea on August 21 and 22. The objective of the workshop was to discuss the benefit of the U.S. Soy Sustainability Assurance Protocol (SSAP) to the local crushing industry’s marketing strategy.
Participants included CEOs and executives from Korea’s two crushing companies and the Korea Soybean Processors Association (KSPA). USSEC gave a presentation on sustainability and how it is being pursued in the production of U.S. Soy. USSEC reviewed the agricultural environment, focusing on water and land, climate changes, and the increasing demand for foods. The presentation also emphasized a sustainable production system to meet the needs of current and future generations.
During the ensuing discussion, the KSPA chairman agreed with the SSAP and showed a willingness to use the sustainable U.S. Soy trademark in KSPA’s soybean oil and soybean meal marketing once the mark is registered in Korea. USSEC also discussed a mass media campaign to educate Korean consumers about U.S. Soy sustainability in FY16.
The team will visit Consolidated Grain & Barge River Terminal and Cargill AG Horizons before the roundtable begins. At the meeting, teams will hear an update on U.S. soybean production; crop condition; and soybean, soybean meal and soybean oil export and domestic production. Participants will also learn more about high oleic acid soybean production, non-GMO soybean production, the U.S. Soy Sustainability Assurance Protocol (SSAP), the current situation of soybean crush and oil in Japan, and labeling issues in the U.S. and the impact of the Food & Drug Administration’s (FDA) new rule on partially hydrogenated oil (PHO). Delegates will also have the opportunity to tour local soybean farms.
The U.S. Soy Buyers Conference is slated to take place in Seoul, South Korea from September 15 – 19.
The U.S. Soy family will commemorate 35 years of partnership between the U.S. Soy industry and Korea’s soy-using industries. United Soybean Board (USB) director Belinda Burrier will talk to participants about the U.S. soybean and corn crop forecast and provide a market outlook and American Soybean Association (ASA) director Ray Gaesser will address new biotech soybean and corn varieties that will appear in the export pipeline in the coming years.
On a recent grower leader marketing mission, U.S. soybean producers and qualified state soybean board (QSSB) staff learned about the aquaculture industries in China and Southeast Asia (SEA). China, the number one producer of seafood in the world (61 percent), and Southeast Asia, with five countries ranked in the top 10 in global aquaculture production, have been big contributors to the seven percent global annual growth in aquaculture production.
In China, the group visited two commercial freshwater farms, which have recently constructed the intensive in-pond raceway system in existing ponds. This technology was first brought to China via a USSEC feeding demonstration and received notice from much of the Chinese freshwater aquaculture industry because water is one of the largest constraints for the country. Since the first in-pond raceway system was constructed in 2014, there are now more than 100 in use or under construction by commercial industry after the environmental and economic benefits of using this technology were realized. This system allows for the same water to be used over and over, unlike traditional pond culture, which requires new water for each grow out. In addition to conserving water, it allows for the increase of biomass production by at least three.
In Southeast Asia, the group was taken offshore to see some hatcheries and marine species grow out farms. MarineLife Aquaculture, located in Singapore, is a forward-thinking group that is seeing significant growth as a fingerling provider of Asian sea bass to SEA. If SEA can improve the genetic quality of its fish through strong hatcheries as well as moving its offshore aquaculture to more modern production techniques, there will be tremendous growth in an already large producer/industry. MarineLife is working to reach the point where it can give a feedmill a desired formulation for feed, versus buying what the feedmill is selling. The company will begin working hand in hand with the USSEC aquaculture team on which is the best formulation for its fingerlings and then approach the feedmill.
Walter Godwin, United Soybean Board (USB) director, pointed out, “With the projected increase in the world population and the need for more protein, aquaculture is rising to the challenge. The use of soybeans to produce extruded feeds will help the bottom line of American soybean farmers.
In Malaysia, the final site visit for this mission was a tour of ocean cages off the coast of Langkawi. The group visited a pilot research farm that is in partnership with a private farmer and the Malaysian government. This is a new initiative to increase the production of seafood for consumption as well as improve the environmental footprint.
In addition to Mr. Godwin, the delegation of grower leaders included American Soybean Association (ASA) vice president Joe Steinkamp; Indiana Soybean Alliance (ISA) director Matt Chapman; Michigan Soybean Promotion Committee member Laurie Isley; Nebraska Soybean Board director Ed Lammers; and Nebraska Soybean Board director and USB director Greg Greving. QSSB staff included Tony Stafford of the Missouri Soybean Board; Andy Tauer of ISA; and Karen Claghorn of the Iowa Soybean Association.
The trip provided the U.S. Soy delegation with an opportunity to see the tremendous growth and further potential in China and SEA’s aquaculture industry.
USSEC participated in the International Soy Growers Alliance (ISGA) meetings in Montevideo, Uruguay from August 13-16.
American Soybean Association (ASA) first vice president Richard Wilkins and United Soybean Board (USB) treasurer John Motter participated in these meetings together with USSEC Marketing Director Market Access/FTO Roz Leeck. The agenda included listening to perspectives from the South American region and the world, along with an ISGA group discussion, moderated by Ms. Leeck. The ISGA’s next steps were discussed, including an April 2016 mission to China and a potential EU mission this fall. The group had the opportunity to visit the Uruguayan Chamber of Commerce and took an all-day tour of a local farm.
While the countries that make up ISGA typically are competitors in the world soybean market, the mission of the group is to collaborate in the development of select soybean markets and to speak with a unified voice opposing market restrictions, scientifically unsound non-tariff barriers to trade relating to health, environmental, chemical residues and biotechnology approvals. ISGA contributors work together to maintain the solid market position of soy against other competitor oilseeds and to communicate the social, economic, and environmental sustainability of the soybean chain.
United Soybean Board (USB) director David Williams traveled to China from July 10-21, participating in and presenting at USSEC’s Soy Trade Price Risk Management Workshop and the USSEC-sponsored 2015 China International Oils & Oilseeds Industry Summit in Ningbo City, Zhejiang Province, China. During his trip to China, Mr. Williams, escorted by USSEC marketing consultant Claudia Chong and China marketing staff, also made servicing tours to key customers in nearby Ningbo.
USSEC China has conducted 13 risk management workshops since 2012. The purpose of the workshops is to help major Chinese buyers improve their risk management skills in the face of an increasingly challenging global market. 40 participants representing major Chinese importers, crushers and feed and integrators from all over China participated in the training. USSEC consultant Sue Goll presented the global soybean market situation and risk management strategies.
In 2014, the Korea – U.S. (KORUS) Free Trade Agreement (FTA) obligated the Korean government to allocate 25,000 metric tons (MT) of food-grade identity preserved (IP) soybeans in the tariff rate quota (TRQ), allowing Korean soy food processing sectors such as tofu, soy milk, soy sauce and soy paste to import U.S. food-grade IP soybeans free of import duty. This number is equivalent to about 10 percent of the Korean food-soybean imports. To maximize the market share impact of U.S. food-grade IP soybeans imported under KORUS FTA, the U.S. Soybean Export Council (USSEC) has encouraged Korean soy food processors to execute TRQ as much as they are allocated, or transfer surplus of TRQ allocation in one sector to others who need more. One example of these tactics was the Korea food-bean buyers teams sent with funds provided by FMD and MAP to the U.S. Soy Global Trade Exchange in 2013 and 2014. This event provided a platform that facilitated food-soybean trade between Korea and the U.S. Coupled with this FAS-funded marketing program, KORUS FTA turned out to be instrumental for the U.S. to capture a dominant market share of Korean food-soybean imports. In 2014, the U.S. captured an 85 percent market share in the target market with 226,800 MT exported to Korea valued at $161 million. In 2013, the U.S. held an 84 percent market share with 207,300 MT valued at $153 million, with a 67 percent market share with 182,800 MT valued at $120 million in 2012. The ratio of TRQ executed by the Korean soy food processors against allocations increased to 95 percent in 2014 from 60 percent in 2013 and just 35 percent in 2012.
USSEC was invited to attend the recent 2015 Natto Queen Ceremony held in Ginza, Tokyo. USSEC Country Director – Japan Mitsuyuki Nishimura and USSEC North Asia Regional Human Utilization Manager & Japan HU Director Masi Tateishi represented USSEC at this gathering and more than 100 media outlets attended the event. The Japan Natto Cooperative Society Federation announced Yoh Yoshida, a successful Japanese actress, as the 2015 Natto Queen.
Beginning in 2002, the Japan Natto Cooperative Society has selected a natto queen every year among celebrities, based on their love of natto and their ability to help spread natto’s popularity to Japanese society. Ms. Yoshida is expected to increase the positive image of natto throughout 2015.
After the announcement of the natto queen, USSEC was recognized by the Japanese natto industry for its achievement on relief efforts of the 2011 Tohoku earthquake and tsunami. Mr. Nishimura was presented an award by the natto industry. Takahiro Noro, Chairman of Japan Natto Cooperative Society Federation, said, “When the big earthquake and tsunami hit Tohoku in 2011, the U.S. Soybean Export Council reached out a hand of early assistance to the affected areas. Thanks to the U.S. soybean industry, we were able to deliver 79,000 servings of natto to the shelters. And therefore, the Japanese natto industry still continues to work on a relief-effort project and that is due to the remarkable achievement of U.S. soybean industry.”
Japanese natto consumption in 2014 hit 125,000 metric tons (MT), all produced from non-GMO identity preserved (IP) food beans. The U.S. still enjoys an 80 percent market share of non-GMO IP beans in Japan. USSEC has supported the natto industry by sending a young Japanese management leader to the U.S. and sponsoring the U.S. Red River Valley award, among other endeavors, in the past. This year, USSEC is collaborating with the natto industry to launch a “natto master project” aimed to further expand the natto demand domestically and globally. USSEC will continue to support Japan’s natto industry to optimize the utilization and value of U.S. Soy.
U.S. agricultural and food products were showcased at the annual 2015 Taipei International Food Show (TIFS) in Taiwan. The American Institute in Taiwan (AIT)’s Agricultural Trade Office (ATO) welcomed Taiwanese agricultural and food service buyers to visit the USA Pavilion at the show, which was held June 24-27.
The USA Pavilion was the largest international pavilion, encompassing 74 booths with more than 20 exhibitors, according to the ATO. According to the U.S. Census Bureau Trade Data, U.S. high-value agricultural exports to Taiwan hit an all-time high in 2014, reaching nearly $1.4 billion. The U.S. has a 95.4 percent market share of soybeans imported for soy foods to Taiwan.
USSEC, together with the California Milk Advisory Board, the Idaho Potato Commission, the United Dairymen of Idaho, and the Wisconsin Ginseng Board, led delegations to exhibit new products, provide samples, and connect with potential buyers at the show.