September 19, 2009

 

Chinese soy buyers express interest in US supply 

 

 

Representatives of the largest soy-buying companies in China, touring the rural US, expressed keen interest in the ability of US farmers to meet the country's demand, a vice president of the American Soybean Association said Thursday (Sept 17).

 

The Chinese visitors asked about "the availability of the product, when did the soy go in, when do you expect to harvest," Alan Kemper told Dow Jones Newswires.

 

Kemper, who hosted the delegation Wednesday on his 3,000-acre farm in Indiana, said he assured the Chinese that, despite some late planting, the crop this year would be very strong and quality would be high.

 

The delegation represented firms responsible for 85 percent of all Chinese soy imports, said Kemper, who is now preparing to harvest his own crops.

 

China is the largest foreign market for US soy, and its imports continue to grow. China bought US$7.3 billion worth of soy in 2008, up from US$4.1 billion in 2007 and US$2.5 billion in 2006, according to US Department of Agriculture data.

 

If China decided to "pull back even a little" on its purchases, it would be "devastating," Kemper said.

 

Normally, such a concern might not be at the forefront, but the trade relationship between the US and China has become extremely tense since President Barack Obama decided Friday (Sept 18) to begin placing duties on the import of Chinese tires.

 

"I wanted the visiting delegation to understand that just because the president slapped a ... tariff on tires ... that did not reflect the policy of the American Soybean Association or rural America. And that we want to sell them soy," Kemper said.

 

Both Kemper and ASA spokesman Bob Callanan said there has been no sign that China would punish US soy exporters in retaliation for the tire decision. But both men also expressed concern that China may be targeting US chicken exports.

 

"They could retaliate in any form they want," Kemper said. "We just don't particularly want it to be an agricultural retaliation."

 

China's Ministry of Commerce has announced an official antidumping investigation into whether the US is selling chicken to China at below-market prices, according to the US-based National Chicken Council.

 

"Although we haven't heard that there are any problems with soy exports or imports into China, we are concerned because of the impact it could have on chicken," Callanan said. "Chickens consume a large portion of our domestic soymeal, so they're a major market. So any negative impact on chicken production in the US or pork production can negatively impact our domestic use of soymeal."

 

Another issue Kemper said he stressed to the Chinese delegation was the rapid advance of genetically modified soy. At times, China has been slow to approve new varieties and plenty more are in the pipeline for commercialisation in the US.

 

Kemper said he asked of the delegation: "Please go back to your respective companies and officials and say we appreciate everything you're doing on the regulatory process, and we want to work together to keep it going because we're going to be turning out a new soy product probably about every two years."