USSEC recently hosted board members and staff of the Illinois Soybean Association (ISA) as they visited India on a market assessment mission from January 13-19. Their meetings began in New Delhi with the Foreign Agriculture Service (FAS), followed by discussions with other U.S-based organizations with agri-operations in India, including the U.S. Grains Council (USGC), ADM and Cargill, which provided the mission with the opportunity to listen to agribusiness management that each handles in India and its neighboring countries. The USSEC team provided its views on soy dynamics in the Asia Subcontinent (ASC) and provided insight to how the program is handled. These meetings gave the ISA team different perspectives on India, with reference to soy business and all factors that govern its utilization and growth.
The Illinois team traveled to Hyderabad in south central India to gain field experience on a poultry farm and a feed mill. They also had the opportunity to interact with poultry entrepreneurs who have strongly considered backward integration (soy crushing) as a means to secure soybean meal for their operations. These meetings and visits helped them gauge the potential of the animal feed industry which accounts for about 90 percent or 4.5 million metric tons (MMT) of the total soybean meal use in the country. Their visit to Indore in central India, which is the country’s soybean-producing hub, gave the ISA team an idea of soybean production methodology, handling, trade and other related processes. Observations at the wholesale grain market provided a picture of soybean farming practices in India in comparison to the advanced technology that the U.S. Soy farmers employ. The interactions at the soy crushing plant of one of the largest Indian soy firms, Ruchi Soya, demonstrated the extent of value addition for soy in the form of soy flour and texturized soy protein (TSP) used for human food. Their interactions with trade associations Soybean Processors Association of India (SOPA) in Indore and the Solvent Extractors Association of India (SEAI) of Mumbai allowed them to examine how the Indian industry views its current and future soy business.
ISA directors Dale Asher, Sherri Kannmacher, John Longley, Bill Raben, Lynn Rohrscheib, Carrie Winkelmann, along with communications director Amy Roady and meeting and event manager Dustin Scott made up the ISA team.
ISA made many observations during their trip to India, including that the country’s soybean exports have dropped significantly; GMO soybeans are not allowed, but the government is still deciding this issue; GM cotton is allowed; the huge, growing population needs more protein; Indians spend 54 percent of their income on food; the country has a very high poverty rate, a growing middle class, and an emerging tech sector; per capita consumption of oil is high; soybean prices run about $14 per bushel; yields are about 1/3 of U.S. yields; there are many small farmers (less than 2 hectares); farming is very inefficient in India, but it keeps people busy; the crushing industry operates at 1/3 capacity; the poultry industry is mostly live market and has to pay for higher soybean prices; India has high tariffs and wants to protect its market, especially for non-GMO soybeans, but there is a lot of potential for U.S. Soy if the market opens up, along with opportunities for whole soybean imports such as jobs, oil for food use, and meal for livestock.
Please click here to view more pictures of ISA's mission to India.