South East Asia buyers

Protein, Price and Freight on Minds of SE Asian Soybean Buyers

By Andrea Johnson 
Reprinted with permission of Minnesota Farm Guide

For international soybean buyers, August is a beautiful time of year to visit Minnesota.

Temperatures are comfortable. The soybean fields look great. Minnesota’s lakes and trees welcome guests. Farmers can also relax as they show their fields, their farm sites and their families to importers who buy every second or third row of U.S. soybeans. Giving buyers of soybean and soybean meal a look at Minnesota farms builds trust that helps the U.S. garner sales.

“Relationships are important,” said Sam Ziegler, Minnesota Soybean director of marketing programs. “We have a very high quality product, and we are building a high level of trust in our products to match it.”

Southeast Asia delegates traveled through Minnesota in late August. They visited Lance Peterson’s farm near Underwood, Jeffery and Karen Larson’s farm near Evansville, and Michael O’Leary’s farm near Danvers, as well as several ag industries.

Port of Grays Harbor AGP Terminal
Ziegler pointed out that one of the greatest marketing successes for northern soybeans began when AGP built a facility on Washington’s Pacific Coast about eight years ago. Soybean checkoff groups from Minnesota, North Dakota, South Dakota, Iowa and Nebraska joined efforts to promote the new terminal, and bring buyers from Asia to farms in the Upper Midwest.

“This partnership has allowed buyers to see Upper Midwest soybeans from planting to harvest and shipment to the Port of Grays Harbor,” he said. “This has proven that this region of the U.S. can produce some of the highest quality soybeans in the world, and maintain that quality to their warehouse in Asia.”

Here are a few thoughts from three of the delegates:

Sri Lanka
Dr. Athula Mahagamage is a partner in Global Nutrition & Management Solutions Pvt. Ltd., Sri Lanka.
He is a veterinarian, and also has his MBA in Financial Administration.

A merchandiser in facilitating trade between the U.S. and Sri Lanka, he advocates for the use of genetically modified (GM) crops.

Sri Lanka is an island country off the southeast coast of the India subcontinent of South Asia. The population is about 20 million, and a few years ago, they banned GM crops.

In his role, Dr. Mahagamage has worked to explain that the GM soybeans hold no health threat. He’s also worked to increase soybean meal sales from the U.S. to Sri Lanka.

In 2012, his country imported 9,014 metric tons (20 million pounds) of soybean meal; and in 2013, the number was 41,065 metric tons (90.5 million pounds). So far in 2014, Sri Lanka has imported 32,539 metric tons (72 million pounds) of soybean meal, according to the USDA Foreign Ag Service.
Dr. Mahagamage said he can easily see the high quality of U.S. soybeans, but his biggest challenge has been related to freight and container-availability issues.

Thailand
Mr. Somphob Auesongtham is the supply chain and global sourcing manager for Inteqc Feed Co., Ltd. of Thailand.

The company’s main business is to manufacture and market animal feed additives. They specialize in shrimp, fish and swine feed, and are the second largest fish feed manufacturer in Thailand.

With a population of 64.5 million people, Thailand is located west of Vietnam.

Thailand purchased 360,000 metric tons (13 million bushels) of soybeans in 2012, 568,000 metric tons (20.1 million bushels) in 2013, and 426,600 metric tons (15.76 million bushels) in 2014.

They purchased 10,000 metric tons (22 million pounds) of meal in 2012, 15,000 metric tons (33 million pounds) in 2013, and so far have purchased 368,400 metric tons (812 million pounds) of soybean meal in 2014.

Auesongtham worked with a group of 20 companies to ship several Panamax ships filled with soybean meal to Thailand this year. He added that Thailand feed companies generally need either high protein soybean products that cost more to purchase, or they want low protein products that are inexpensive.
His biggest question in August was asking why soybean meal prices remained high when soybean prices had dropped significantly.

Vietnam
Ms. Tran Ngoc Thuy (Tina) is a purchasing manager in Vietnam for De Heus, a privately owned business with global operations.

One of the top 15 suppliers of animal feed in the world, De Heus operates in more than 50 countries outside of its headquarters in the Netherlands, and has more than 3,000 employees. The feed manufacturers are building their fifth and sixth factories in Vietnam to provide high quality feed for pigs, poultry and cattle for the country’s 89 million people.

“The farms are very big in the U.S., if you compare with Vietnam where there are smaller farms,” she added. “You hear reports there are big farms, but you come here and you see it with your own eyes.
“The machinery is very modern, and you can’t find that in Vietnam.”

De Heus also has operations in Brazil, and the company will buy soybeans from whatever country has the best product to meet their needs at the best price. They are primarily interested in protein levels, Tina added.

Vietnam purchased 297,000 metric tons (10.9 million bushels) of soybeans in 2012, 608,000 metric tons (22.3 million bushels) in 2013, and 516,000 metric tons (19 million bushels) in 2014. They purchased 58,000 metric tons (128 million pounds) of soybean meal in 2012, 268,500 metric tons (592 million pounds) in 2013, and 316,000 metric tons (696.6 million pounds) in 2014.

Tina encourages U.S. farmers to keep doing a great job of producing high quality soybeans, and she also wants everyone to visit Vietnam. The best months to travel there are April, May and October, although travel in Southern Vietnam is still good from November to February – the same time as U.S. soybean farmers can take time away from their farms.

When you think of all of the steps that it takes to raise soybeans here for livestock feed in Southeast Asia, it’s really amazing that it gets done.

Success has occurred because of good relationships built between countries.

“Today, the AGP terminal at the Port of Grays Harbor is one of the greatest marketing successes for soybeans,” said Ziegler. “Vietnam, Thailand, Sri Lanka and many other countries in Southeast Asia are huge customers, and will continue to be for many years to come, thanks to farmers showing their crops – and this great partnership with AGP.”