U.S. corn is on its way to Indonesia for the first time in approximately two years. Two Panamax shipments of U.S. corn are expected to arrive in Cigading, Indonesia, later this month and a third is due to reach the port in June, for a total of 167,270 tons (6.58 million bushels). In addition, USDA load inspection reports indicate more U.S. corn will soon be en route to Indonesia. “The U.S. Grains Council has been conducting programs with Indonesian grain buyers to familiarize them with the U.S. trading system and the high quality of U.S. grains,” said Adel Yusupov, manager of international operations – Asia. “We are starting to see the benefit of those efforts now.” Although Indonesia has imported U.S. corn in the past, none of the 400,000 tons (15.7 million bushels) of corn they imported last year was from the United States.
Use of distiller’s dried grains with solubles (DDGS) was the focus of recent workshop in Egypt. On Tuesday, May 9, the U.S. Grains Council hosted a DDGS workshop, in cooperation with CAIRO 3-A, an Egyptian trading company, for approximately 100 livestock, poultry and aquaculture producers, as well as feed millers from Egypt, Syria and Lebanon. U.S. nutrition consultants Dr. Lance Forster and Dr. Mamdouh Sifri of Archer Daniels Midland Company, a Council member; and Dr. Hussein Soliman, USGC director in Egypt, discussed the basics on how DDGS is produced and how it can be used in feed rations. Workshop attendees also discussed DDGS’ nutritional profile. Following the workshop, Hussein and the Council’s consultants participated in on-farm consultations to discuss DDGS inclusion rates. “Providing this type of technical support to dairy, beef, poultry and fish producers is critical to promoting and expanding the use of DDGS in the regions,” noted Chris Corry, senior director of international operations. “This program was possible thanks to grants earmarked for DDGS promotion from the Iowa Corn Promotion Board, South Dakota Corn Utilization Council and Minnesota Corn Research and Promotion Council.” Egypt’s first shipment of DDGS arrived in April, the culmination of Council efforts to familiarize Egyptian grain importers and end users with this grain co-product. Soliman estimated that Egypt could import 200,000 tons in the next few years, if DDGS feeding trials for dairy, fish, are successful.
The U.S. Grains Council/Beijing office reports that the first private purchase of U.S. corn has been made by Chinese importers. The two shipments – totaling 100 metric tons (3,937 bushels) each – are currently in Hong Kong awaiting final import permits to be issued. “We anticipate that this corn will be able to enter China with no constraints,” said Mike Callahan, USGC director of international operations – Asia. “We look forward to this triggering increased sales and improved trade relations between China and the United States.” The Council views the small purchase as a test shipment by the tariff rate quota (TRQ) holders. Importing a small amount will give these buyers a chance to check China’s import procedures as well as the country’s general sanitary and phytosanitary inspection procedures. The Council has been involved in market development in China since 1982 and the two buyers have been involved in a number of the Council’s activities over the years in China. “We have worked for several years with China’s TRQ holders to familiarize them with the U.S. feed grains market and our export capabilities and procedures,” Callahan explained. “We hope that they have a good experience with the U.S. corn that they purchased and that we have repeat business with them.” Currently, China’s annual corn demand and domestic corn production are both at about 130 million tons. Chinas’ ability to produce more corn domestically is becoming more challenging and as China’s corn demand continues to grow, we expect that they will begin to look for reliable corn suppliers like the United States.
Securing duties at zero percent and minimizing the impact of biotech regulations will be priorities for the U.S. Grains Council as the United States negotiates a free trade agreement (FTA) with Malaysia. The largest corn importer in Southeast Asia, Malaysia imports about 2.5 million metric tons of corn annually. Despite Malaysia’s liberal import regime of applying no duties or other policies that restrict market access to feed grains or co-products, the United States has been only a residual corn supplier to that market. However, sales of distiller’s dried grains with solubles (DDGS) have been expanding rapidly over the past two years as Council programs have focused on working with individual feed millers. This targeted marketing strategy resulted in the Malaysia importing 12,500 tons of DDGS for the first time in 2004. In 2005 shipments grew to 34,000 tons, and, in the first two months of 2006, exports were up 40 percent compared to the same period last year. In addition to continuing to promote DDGS, the Council hopes to create new opportunities for U.S. grains in Malaysia, and through the FTA negotiations prevent the implementation of regulations that would restrict trade of approved products of biotechnology. USGC members may read the comments submitted by the Council, by going www.grains.org and clicking on the GRAIN Center.
The USDA is forecasting a strong market for U.S. corn, according to the World Agricultural Supply And Demand Estimates (WASDE) released recently. According to WASDE, the United States will export approximately 2.15 billion bushels of corn in 2006/07, an increase of 125 million bushels compared to last year. “Strong sales so far this year are pushing the USDA’s export estimates higher,” noted Ken Hobbie, U.S. Grains Council president and CEO. “Export sales continue to exceed the trade’s expectations – surpassing 1.1 million tons (43 million bushels) last week.” More than half of these sales were to Japan, Mexico, South Korea, Taiwan and Indonesia – markets where the Council has continuously worked to build and maintain demand for U.S. grains. The USDA also estimated production and export of both sorghum and barley will drop this year, but the tighter supplies will support stable, or increased, prices compared to last year.
A comprehensive, balanced agreement is essential to a successful conclusion of the Doha round of the World Trade Organization (WTO) negotiations, according to a statement from the Ag Trade Coalition. The coalition supports negotiations across the three main issues for agriculture: market access, domestic support and export competition. The U.S. Grains Council signed the statement, along with Council members American Farm Bureau Federation, Corn Refiners Association, Idaho Barley Commission, National Barley Growers Association and National Corn Growers Association. It calls for “substantial and ambitious expansion in access to markets on a fair and transparent basis through aggressive tariff reduction and tariff-quota expansion; the meaningful and substantial reduction of trade-distorting domestic support; and the elimination of export subsidies along with disciplines on export credits, the monopoly powers of state trading enterprises and differential export taxes.” The coalition also supports food aid restrictions only to avoid harming commercial markets. The statement comes as trade negotiators in Geneva are debating provisions on “sensitive” and “special” product designations that could potentially minimize market access improvements, especially in developing countries. “The willingness of developing countries to become fully integrated in the global market is key to the Doha round’s success,” said Kevin Natz, USGC director of trade policy. “Lowering barriers to trade will not only provide a boost for U.S. feed grain exports, but developing countries will benefit from reforms that enhance their ability to compete while improving their potential for income growth.”
International media is reporting the World Trade Organization (WTO) upheld the preliminary ruling in favor of the United States, Canada and Argentina in a case filed against the European Union (EU) in 2003. Reports this week indicate the WTO has found the EU ban on biotechnology to be in violation of trade agreements. The three countries filed the WTO case in response to the EU’s moratorium on the import of genetically modified crops and their products. Low duties and a shortage of grain in Europe in recent years would have resulted in high trade volumes. Of the 2004/05 U.S. corn crop, 52 percent was derived from biotechnology and 17 percent was exported.