July 30, 2018


Southeast Asia a major market for US soybeans, wheat



Southeast Asia has become a major market for US agricultural products, particularly soybeans, and wheat. Last year, the 11-nation region (which includes Timor-Leste) ranked as the third-largest regional market, behind East Asia and North America, according to a report by the US Department of Agriculture's (USDA) Foreign Agricultural Service (FAS).


Since 2008, US exports to Southeast Asia have grown rapidly, with sales of farm and food products totalling nearly $11.8 billion in 2017, representing a 68% increase.


The report noted that Indonesia, Malaysia and the Philippines are among the region's high-growth import markets for agricultural products, accounting for nearly 55% ($6.4 billion) of US agricultural exports to Southeast Asia in 2017.  


Vietnam and Thailand are also fast-growing markets in the region. Together they accounted for more than half of all US agricultural export growth to the region over the last decade.


According to the USDA-FAS report, US sales are strongest in the bulk category, including soybeans and wheat. It added that high demand for bulk products has largely been driven by the region's rapidly expanding poultry and aquaculture industries, as well as by growing food demand, especially in Indonesia.


In 2017 US agricultural exports to Indonesia, Southeast Asia's largest economy and with a population of 263 million in 2017, totalled nearly $2.9 billion, an 8% increase from 2016. Top US agricultural exports to Indonesia include soybeans, wheat, feeds and fodder, and dairy products.


Top exports to Philippines, Malaysia


In the case of the Philippines, which is one of the fastest-growing economies in Asia and with a population of 104.9 million in 2017, US food and agricultural exports to that country totalled nearly $2.6 billion last year, an increase of 1% from 2016. Top exports include soybeans and soybean meal, wheat, dairy products, and pork and pork products.


US agricultural exports to Malaysia in 2017 totalled $924 million, a 15% increase from 2016. Top US exports include soybeans and dairy products.


Despite growing exports of agricultural products to Indonesia, Malaysia and the Philippines, the USDA-FAS noted that these can be challenging marketplaces. For example, it said, the Indonesian government's policies aimed at agricultural self-sufficiency are already threatening US exports of soybeans, meat, and dairy. "Import regulations are often complex and non-transparent, affecting horticultural and animal products in particular", it added.


Also, halal certification is central to getting many food products into Malaysia and Indonesia.


In the Philippines, a host of tariffs, sanitary and phytosanitary restrictions, and import licensing issues create difficulties for the sale of imported meats and other agricultural products, USDA-FAS said.


In addition to trade issues, it noted that Indonesia, Malaysia and the Philippines have all entered into, or are negotiating, bilateral and regional free trade agreements with US competitors. "This could affect the US agricultural market share in these countries", it said.

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