March 6, 2006
Johanns And Portman Told To Secure Market Access Gains At WTO Negotiations
Sixteen major agricultural commodity groups last week wrote U.S. Trade Representative Rob Portman and USDA Secretary Mike Johanns urging them to lock in meaningful market access gains for each major U.S. commodity before market access details are finalized via WTO negotiations slated to be complete by April 30. The American Soybean Association, American Sugar Alliance, National Cattleman’s Beef Association, National Corn Growers Association, National Pork Producers Council and other commodity groups, signed a letter
“Our producers will find it difficult to support a final WTO agreement that requires substantial reductions in trade-distorting domestic support for U.S. farmers while allowing our largest and fastest-growing competitors in the world to continue or further stimulate their competitive export sectors,” the groups wrote.
Importantly, the groups said U.S. negotiators should insist that developing countries that have 5 percent or more of the world market share of any commodity or semi-processed product reduce their tariffs and subsidies just like developed countries. Those countries include Brazil and Argentina for soybeans, soybean meal and soybean oil exports; Malaysia and Indonesia for palm oil; Brazil and China for poultry and pork; Argentina, India and Uruguay for beef; Argentina and China for corn; Argentina for wheat; Thailand, India and Pakistan for rice; Brazil and Thailand for sugar; and Brazil for cotton.
The groups also focused on exempting certain sensitive products from formula cuts. The letter said that if language does not specify restrictions on how, and to what extent, sensitive products can be designated, “it will be impossible to reach consensus on this issue in the bilateral phase of negotiations.” The groups expressed their concern that developing countries will use the special products and the safeguard mechanism against import surges to avoid tariff reductions.”
FAPRI: Increased Concentration In Global Soybean Production
Despite continued high energy prices, the Food and Agricultural Policy Research Institute (FAPRI) expects world economic growth to remain strong in the coming decade, at around 3 percent per annum, boosting consumption of vegetable oil, dairy products, and meat in many parts of the world. According to FAPRI, solid commodity prices and a persistently weak U.S. dollar in industrialized trading countries keep U.S. exports strong for the next 10 years.
FAPRI continues to foresee greater concentration in soybean production. Argentina, Brazil and the United States increase their combined production share from 82 percent to 84 percent of world production. World soybean production could be 277 million tonnes by 2015-16, a 24 percent increase from 2005-06, FAPRI says. The Institute also believes that Brazil will overtake the United States as the largest soybean producer and exporter in the world, holding a 34 percent share of world production and a 51 percent share of world trade by 2016. The U.S. share of soybean production and trade could drop to 30 and 27 percent, respectively, if FAPRI’s forecast holds true. However, China, the world’s largest importer of soybeans, likely will expand its imports from 41 to 52 percent of total world imports by 2015-16, which could be a continued boost to the U.S. soybean sector.
FAPRI also reports that new policy developments and rising interest in renewable fuels due to high fossil energy costs are expected to boost ethanol and biodiesel markets in the United States, European Union and Asia. Industry thus expands its use of oilseeds, grains, and sugarcane, and prices are sustained.
Established in 1984 by a grant from the Congress, FAPRI is a dual-university research program with research centers at the Center for Agricultural and Rural Development at IowaStateUniversity and the Center for National Food and Agricultural Policy at the University of Missouri-Columbia. FAPRI uses comprehensive data and computer modeling systems to analyze the economic interrelationships of the food and agriculture industry.
SOPA Opposes Excise Duties On Edible Oils
The Soybean Processors Association of India (SOPA) has urged the Union finance ministry not to re-impose excise duty on edible oils as it would lead to tax avoidance resulting in huge disparity within the industry. SOPA’s chairman Rajesh Agarwal said in a letter to Union Finance Minister P Chidambaram that excise duty on edible oil would also result in lower realization for oilseed farmers. It would not generate much revenue for the government, while at the same time create huge disparity in the trade, he added.
Reacting to reports of representations sent to the government requesting for the re-imposition of excise duty on packaged and branded edible oils, Agrawal said the soybean processing industry has been passing through a very difficult phase in its operations. He said the re-imposition of excise duty on edible oils would badly hit the industry.
He also suggested that the government should impose such tax/duties which should be leviable and paid by one and all at the first point along with the customs duty or at the stage of production without any exemption at all.
PAGE TOP South Korea Rejects Some Brazilian Soymeal
South Korean feed producers have been rejecting low protein solubility Brazilian soymeal for failing to reach the required minimum protein levels. Last week, South Korean feed traders reported that local feed makers had rejected one cargo of Brazilian soymeal with low protein solubility and were claiming compensation on another. The protein solubility of the two cargoes was below the required 70 percent, making it difficult for animals to digest, traders said.
Earlier in February, the Korea Feed Association rejected 55,000 tonnes of Brazilian soymeal from Cargill. The protein solubility of the material, which arrived on February 17, was only between 50 and 60 percent, according to South Korean traders.
Soy Complex Higher As Bird Flu Concern Wanes
The soy complex closed higher on March 2 reflecting renewed fund buying amid an easing of concern over bird flu. March bean futures closed up $4.96 finishing at $217.15; May was $4.78 higher, closing at $221.93; and July gained $4.68 ending at $225.88. March meal was up $4.19, closing at $194.23; May was $3.86 higher, finishing at $196.32; and July increased $3.42 to finish at $199.19. March oil closed $12.57 higher to finish at $537.26; May was up $13.23, closing at $545.64; and July gained $12.35, ending at $554.02.
