Dominican Republic soymeal imports to decline

Estimates for the Dominican Republic's MY 2007 imports of soymeal have been revised downward from 450,000 to 368,000 tonnes based on US trade data, according to a USDA attache report posted Friday (April 3) on the Foreign Agricultural Services Web site.

Poultry production is reduced due to higher input prices and lower demand. The forecast for MY 2008 soymeal imports reflect this decline. MY 2007 soyoil imports have been revised downward to reflect industry reports and US trade data. Forecast for MY 2008 is at the same level. As a result, competitive pricing, US market share of soyoil reached almost 50 percent in MY 2007. Argentina and Brazil usually have the bulk of the market. The DR-CAFTA implemented in March 2007, locked a zero duty for soymeal and crude degummed oil and phases out duties on refined oil over 15 years.

Soy is not produced in the Dominican Republic. Therefore, imported soy products satisfy all local market requirements. There are also practically no oil meals produced in the Dominican Republic, with the exception of about 1,000 tonnes of coconut meal and small quantities of palm kernel meal. Major consumers, feed processors for the local poultry and swine industries, rely entirely on imported US soymeal (48 percent protein) to satisfy their requirements. The US has remained the Dominican Republic's major supplier of soymeal, because of quality, price, and proximity.

In MY 2007, an overproduction of poultry occurred which depressed local prices. Producers in turn, were forced to begin reducing their inventories and as a consequence consumption estimates for MY 2007 were lowered. In the mean time, higher international prices also forced local producers to decrease the poultry and swine population.

Soymeal remains with a zero import duty under the new DR-CAFTA free trade agreement implemented on March 1, 2007. The agreement locks in a zero duty for US crude oil, and phases out duties on refined oil over 15 years. Domestic vegetable oil production in MY 2007 remained flat with 16,500 tonnes of crude palm oil (plus a small volume of palm kernel oil) including about 2,000 metric tonnes of coconut oil. Local production of oil represented less than 12 percent of the total supply.

Total domestic consumption of edible oils (soy, sunflower, corn and palm) in MY 2007 was about 128,600 tonnes. This total includes about 51,000 tonnes of crude degummed soyoil from Argentina and Brazil; 42,700 tonnes from the US, including an additional 2,000 of US refined soyoil imported directly by the grocery importers. In addition, 4,430 tonnes of crude sunflower oil from Argentina; 6,430 tonnes of crude corn oil from the US and 7,259 tonnes of crude palm oil from Colombia. Total consumption is not expected to grow much more in MY 2008.