American Soybean Association highlights importance of Chinese market

The American Soybean Association (ASA) testified last week on the importance of the China export market to US soy producers at a hearing of the US International Trade Commission.

 

Last year, the value of US soy exports to China reached a record US$9.2 billion. US soy represents more than half of the total value of US agricultural exports to China.

 

"It is impossible to overstate the importance of China as a market for US soy," said ASA Vice-President Randy Mann, who is chairman of ASA's Trade Policy and International Affairs Committee. "More than half of the world's soy exports are purchased by China. The 22 million tonnes of US soy expected to be exported to China in 2010 represent over 50% of all US soy exports and 25% of the US soy harvest. In other words, one of out of every four rows of soy grown in the US is exported to China."

 

Prospects for continued growth in Chinese soy imports are excellent. As a result of dynamic economic growth, more Chinese consumers are seeking and can afford a higher standard of living, including more protein and vegetable oil in their diet. China's ability to supply these needs through increased production of soy and other feeds and oilseeds is limited, so most of the increase in demand will be filled by imports.

 

"US soy farmers are most appreciative of China's expanding import market for soy," said Mann. "China is, by far, our single largest export customer. We are pleased there have not been any recent disruptions in the soy trade between China and the US. However, like any trading relationship, issues arise from time to time that need to be addressed."

 

One area that could impact China's imports of US soy is a lack of understanding concerning quality and safety of US soy and soy products. Chinese authorities have from time to time been concerned that some shipments of soy, due to their colouring, may include planting seed that is coated with a pesticide treatment. However, in some instances, soy is naturally discoloured during growing and harvesting.

 

"ASA is very pleased with the recent announcement by US Agriculture Secretary Tom Vilsack that China and the US have agreed to address inspection, quarantine, and quality and safety of US soy exports to China," Mann said.

 

Another issue that has affected US exports of soy products is China's requirement of a phytosanitary certificate for all imports of soyoil. Due to extensive processing, which eliminates any risk of soyoil harbouring injurious plant pests, the US does not require or issue a phytosanitary certificate for imports of soyoil, and international standards do not call for a phytosanitary certificate on soyoil.

 

"For several months, USDA officials have been working closely with Chinese officials to identify an alternative approach that would be acceptable to both countries," Mann said. "We are appreciative that an interim solution to allow US exporters to sell soyoil to China has been developed, and that US sales of soyoil have taken place in recent weeks. We are hopeful that a long-term solution where no phytosanitary certificate is needed can be agreed upon by US and Chinese agencies in the future."

 

Another key area which has affected China's imports of US soy in recent years is its policies regulating registrations of agricultural commodities derived through biotechnology. China's regulatory approval process for commodities containing biotech traits sometimes has been unpredictable and opaque, causing concern in the US soy industry about obtaining trait approvals prior to commercialisation. ASA is actively supporting efforts to encourage China to allow applications at the time they are made in the US and other countries.