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Civil unrest disrupts shipment of soybeans into the Middle East

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By Doug Rich

Two U.S. soybean growers traveled to Amman, Jordan, recently to participate in a roundtable discussion with regional soy trade leaders.

Scott Singlestad from Waseca, Minn., and Steve Wellman from Syracuse, Neb., discussed with these trade leaders how markets in the Eastern Mediterranean can minimize U.S. soy trade interruptions during times of political unrest.

According to the United Soybean Board two years ago, countries in the Middle East, such as Syria, were promising markets for U.S. soy exports, but political unrest threatens the stability of the region and has long disrupted lines of trade. Before the “Arab Spring” in 2011, U.S. soybean farmers were exporting nearly 18 million bushels of soybeans to Syria. Since that time this market has been reduced for all U.S. commodities.

“We are trying to facilitate some of the areas where they need help and...our main reason for doing a project like this is to help them utilize more soybeans,” Singlestad said. “We are here to provide information that they want on soy in nutrition for both humans and animals. There is no better way to keep peace in the world than to make sure everyone has enough food.”

Singlestad is a USB director and serves on the USB Meal Action Team.

“There has been a lot of civil unrest here as we all know and market disruptions caused by that unrest,” Wellman said who is chairman of the American Soybean Association. “Part of the session in Amman, Jordan, was listening to those customers and finds ways for them to purchase soy. There is still a demand products that contain soybean meal and we certainly want to be a supplier to this marketplace.”

“Markets in the Middle East represent a valuable and impactful dual opportunity for the U.S. soy family,” Wellman said. “Soybean provide nutritious protein for those in need and as the markets emerge and buying power increases, so does the demand for the animal agriculture products of which our soybeans are such an integral part.”

Singlestad and Wellman said they learned from discussions with their customers in the Middle East there were problems with having enough products and being able to transport them where needed. In addition, some of the countries have financial sanctions against them that make it difficult to get payments and money transfers for product that is moving around the region. Wellman said the poultry industry in the Middle East is still optimistic about demand for their product. If there is increasing demand for poultry products in the Middle East that will increase the demand for soybean meal.

Civil unrest has meant changing ports that are less familiar to all parties. This creates some logistical problems when moving product to the crush facilities. Wellman said there are some crush facilities that are under utilized because of the difficulty in getting product to them.

The U.S. has primarily been shipping whole soybeans into the country as well as a small amount of meal.

“If we look at the past record, Egypt is the sixth largest customer for U.S. soybeans,” Wellman said. “If we look at the meal, Morocco is the fifth largest market soy meal customer. Morocco is also the largest soy oil customer in the world. So there are some key customers in this region.”

Wellman said their goal is to ship more whole soybeans into this region. There is the potential for more soybean processing with crushing facilities that are currently processing canola.

In addition to the roundtable discussion in Amman, Wellman and Singlestad attended the dedication of the U.S. soybean Export Council’s Dubai office. This office, located in an international business hub of the area will provide the U.S. soy industry success to even more potential customers. Wellman said the region served by this office would account for 53 percent of the world’s population growth from 2013 to 2030.

Doug Rich can be reached by phone at 785-749-5304, or by email at richhpj@aol.com.

Date: 7/8/2013



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