June 13, 2012

 

US Virginia ships more soy to China

 

 

US Virginia ports are shipping more soy cargoes to China to meet its rising consumption.

 

Perdue AgriBusiness, which owns and operates a deep-water export facility in Chesapeake, has reached an agreement to ship millions of bushels of soy to China, the company and state officials announced Monday (June 11).

 

The deal with Dandong Port Group and Dandong Pasite Grain and Oilseed Co., in northeast China, is an expansion of an export agreement reached in September.

 

In that deal, Dandong, the largest buyer of soy in China, signed contracts to buy 100,000 tonnes of soy. Now the company plans to buy up to 550,000 tonnes of soy from the 2012 crop. That would be 10 Panamax vessels each holding about 55,000 tonnes.

 

The price of soy changes on commodity markets. But the value of the shipments could be more than US$300 million, based on Friday's (June 9) spot price of US$14.86 on the CBOT.

 

"This is good news for our soybean producers, the port and everybody in between," said Todd Haymore, Virginia's secretary of agriculture and forestry.

 

Haymore said the USDA is forecasting that about 30,000 additional acres of soy will be planted in Virginia this year. The state typically produces about 500,000 acres.

 

It's difficult to estimate how much of the soy that will be exported to China will come from Virginia farms, said Julie DeYoung, a spokeswoman for Perdue AgriBusiness, which ships soy from other states through Virginia ports.

 

"We source primarily from the mid-Atlantic, and we are a major buyer of Virginia soybeans." she said.

 

The amount of soy in the deal "is fairly close to the total production of Virginia's soybean crop," said Dick Atkinson, executive director of the Virginia Soybean Association.

 

"That does not necessarily suggest that Perdue is only going to acquire soybeans from the state of Virginia," he said, but "Virginia soybeans will be a large portion of those beans."

 

China uses soy as feed for cattle and other livestock. Perdue and Dandong also reached an agreement in which Perdue will assist the company in improving the quality of its animal-feed stock from soy delivered by Perdue.

 

Agricultural exports from Virginia reached an all-time high of US$2.35 billion in 2011, driven by increased demand for soy, grains and meat products in the Middle East, Asia and Europe.

 

Morocco was Virginia's top agricultural export customer in 2011, with shipments of products totalling more than US$360 million.

 

China was the second-largest customer at US$304 million, but the new soy deal could propel it into the top spot, Haymore said.

 

Agriculture and forestry are Virginia's largest industries, with a combined economic impact of US$79 billion annually: US$55 billion from agriculture and US$24 billion from forestry. About 500,000 jobs in Virginia are linked to farming and agribusiness.