Let’s make a deal08/22/2019 | Soybean Exports, Economics
By Bethany Baratta, ISA senior writer
Despite ongoing trade disruptions, global soybean customers trust the quality and consistency of U.S. soybeans. That’s why global soybean purchasers met U.S. grain company representatives in Chicago this week for the U.S. Soy Global Trade Exchange and Specialty Grains Conference. The conference was hosted by the U.S. Soybean Export Council (USSEC) and the Specialty Soya and Grains Alliance (SSGA). The Iowa Soybean Association (ISA) was a sponsor for the event.
Grain companies and sellers met with current and potential customers during trade team invitational meetings. Divided into regions, U.S. grain company representatives had 30 minutes to make their sales pitch to potential customers.
“The best way to describe it is speed dating,” said Brian Kemp, an ISA member from Sibley. As a director on the USSEC board representing the American Soybean Association, Kemp served as a moderator with customers from the Middle East-North Africa (MENA) region.
The premier trade event, Kemp said, is just one way USSEC is working to further sales of U.S. soybeans.
“We are working diligently to foster new relationships and broaden the portfolio of U.S. soybean buyers and this is one way to do that—to expose buyers from all over the world to U.S. soybean products,” he said.
Top quality, consistency
Diaa Ghaly, managing director at Trans Globe LLC, a feed, grains and forage company based in Woodstock, Georgia, reiterated to potential buyers the quality and consistency of the products sourced from the United States.
“There is a great opportunity in the market because of our prices and our consistent quality,” Ghaly said. “The U.S. product has consistent quality. You can depend on it. It does not change.”
The consistency of the U.S. soybean product attracts buyers like Mahmoud Al Anani of Cairo, Egypt. He’s the chairman of Dakahalia Group, which operates one of the largest chicken integration systems in the region.
The company-owned feed mill processes nearly 4,500 tons of feed per day. What grain the company doesn’t use in feed production gets sold, Al Anani said. The protein content of U.S. soybeans (at 35 to 38 percent) is one of the biggest reasons why he buys it from the United States.
“For me, the two biggest factors are quality and price. Often, the (U.S.) soybean quality is better than the rest of the world, but sometimes the price is higher,” Al Anani said. “Sometimes I sacrifice a few dollars to get U.S. products.”
The MENA region is a growing opportunity for U.S. soybean exports, according to Mousa Wakileh, USSEC regional consultant for the MENA region.
The countries of Egypt, Tunisia, Morocco, Saudi Arabia and Israel import over 150,000 metric tons of U.S. soy and the region represents 4 percent of total U.S. soy exports. Increased poultry and aquaculture production throughout the region and the addition of three soybean crushing facilities in Algeria will ramp up soybean demand for the region, Wakileh said.
“There is an opportunity to switch to U.S. soybeans after building the crushing facilities. The facilities will have huge capacities, so they will want bigger vessels of soybeans from reliable sources. They will look to the United States to fulfill that need,” Wakileh said.
China focuses on relationships
U.S. soybean sales to China effectively stopped after a 25 percent tariff was put into place as a result of an ongoing trade impasse between the two countries. But that didn’t stop discussions between U.S. grain companies and Chinese grain buyers at the conference this week.
“The U.S. soy industry has been in China for over 35 years now, building a relationship, a partnership with all the value chains in China,” said Xiaoping Zhang, USSEC director of the Greater China Region. “We don’t want to drain these relationships; we still want to maintain and expand these relationships to build the customer’s preference for U.S. soy. We think the trade issue is temporary and we think it’s something that sooner or later will be solved.”
The trade impasse with China reiterates the importance of expanding the U.S. soybean sales portfolio, Kemp said.
“We’ve been working on expanding markets for a long time with USSEC, but it’s even more important now in light of the China trade situation,” he said.
China is largely buying soybeans from Brazil, shifting other buyers to the United States and other countries to source their soybean supplies.
Shawn Hulm, oilseed product line manager for Gavilon, reiterated to potential Chinese customers the importance of their business.
“China is a huge market for us, and it is very important for us,” he said. “All we can do is wait and see how the talks between President Trump and President Xi turn out. We want to get back to normal trade flows, normal marketing, normal distributions. I would love to start selling soybeans to China again.”
Contact Bethany Baratta at email@example.com.
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