With a population of 1.65 billion, the ASC region is home to 23 percent of the world’s population. With the regional GDP average growth at greater than 5 percent and increasing, this region is growing rapidly. A new pro-business and growth-oriented government won a landslide election in India in May of 2014, and commercial interests in India are optimistic about positive changes in commercial and trade policies. The region faces infrastructure issues and infrastructure rebuilding. Political instability remains a continuing problem in Pakistan.
U.S. soy imports to Bangladesh exceeded 100,000 metric tons in the past 12 months. India remains a large export market for soy protein isolates and concentrates and occasionally imports U.S. soy oil. Commodity soybean imports to India are uncertain due to the lack of GMO approvals. Processors and traders are increasingly looking to the domestic market and in 2014 use of domestically produced soy meal exceeded exports for the first time. Domestic production of soy in India continues to decline. Promotional efforts can increase direct demand for U.S. soybeans and Hi-Pro soybean meal in Pakistan, Bangladesh and Sri Lanka.
In 2013, domestic soymeal consumption was 4.3 MMT, while domestic soy usage in human food was 1 MMT. Bangladesh is increasing its crushing capacity and Pakistan still has unused crushing capacity. The region’s industry is becoming increasingly consolidated. The compound annual growth rate of poultry broilers is 12 percent and 7 percent for layers. For farmed freshwater fish, compound annual growth rate is 8 percent and farmed shrimp is 8 percent. The compound annual growth rate of the human consumption of soy is 10 percent.
Market access issues that will need to be addressed in the ASC region are the alleviation of GMO concerns in India and Bangladesh, the establishment of zero or low duty for defatted soy flour, soybean meal and other soyfoods, and the encouragement of soy utilization in government feeding and social welfare programs.
ASIA SUBCONTINENT DIRECTORY
ASIA SUBCONTINENT 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 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.