April 24, 2006
Strong Ag Support For U.S.-Peru Trade Agreement
A coalition of 58 agricultural organizations and companies that includes the American Soybean Association has written to all of the members of Congress urging support of the Peru Trade Promotion Agreement (PTPA). Current U.S. agricultural exports to Peru include $16 million in oilseeds and related products.
According to the letter, “PTPA sets a new and higher standard for future free trade agreements.” Peru is already a large importer of many U.S. agricultural products. “PTPA will provide U.S. agriculture producers and exporters the opportunity not only to preserve but to increase market share.”
The coalition also said: “Many food and agricultural products from Peru already receive duty-free treatment in the United States through the Andean Trade Preferences Act or the Generalized System of Preferences, while U.S. farm exports face significant barriers in Peru. Without implementation of the PTPA, U.S. agriculture will continue to be prejudiced by this non-reciprocal trade and will be forced to compete for business in Peru against countries that already have free trade agreements with the South American nation.”
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Johanns Says Bush Administration Remains Committed to Concluding Doha Round
Agriculture Secretary Mike Johanns denies suggestions that replacing Rob Portman with Susan Schwab at the Office of the U.S. Trade Representative (USTR) lessens the administration’s commitment to concluding the Doha Round of global trade talks. “There is absolutely a commitment to the Doha Round by this administration,” he said. “USTR remains committed and so does the White House. I don’t see any let up,” Johanns said, adding that his hope is that the Senate will approve Schwab to the position as soon as possible.
Johanns also said he is prepared for the next phase of the WTO work. He noted that WTO Director General Pascal Lamy “will check the pulse” this week to determine how much progress has been made during meetings in Geneva. At that time, said Johanns, Lamy will make a decision on whether to “pull the trigger” and bring trade and agriculture ministers back to Geneva next week. “I have time set aside if that’s necessary,” the secretary said. “But at least as of today, that final commitment is not there.”
EU Biodiesel Capacity Could Reach 6 Million Tonnes By End Of 2007
European Union’s biodiesel capacity could jump 50% in 2007, according to Pascal Cogels, chairman of the European vegetable oil producers and processors federation Fediol. Biodiesel production capacity is expected to reach 4-4.5 million tonnes at the end of this year and 6 million tonnes by the end of 2007. As a result, prices of rapeseed are expected to rise and inspire farmers to grow more rapeseed, he said. Production capacity of biodiesel in 2005 was 2.6 million tonnes.
Cogels said soyoil had the potential to make up to 25% of EU’s biodiesel production. Currently, about 80% of all biodiesel output is based on rapeseed oil because of its availability and quality. However, growing demand has raised prices sharply, making room for cheaper alternatives such as imported soyoil.
Argentina Expects Record Soy Crop In 2005-06
Argentina will produce a record 40 million tonnes of soybeans in 2005-06, the Agriculture Secretariat said last week.In 2004-05 Argentina produced a record 38.3 million tonnes of soybeans, according to the Secretariat. USDA has forecast Argentina’s 2005-06 soybean output at 40.5 million tonnes.
The Secretariat estimates planted area for soybeans at 15.2 million hectares, up 5.6% from the 14.4 million hectares planted a year ago. The increased planted area stems from dry weather that prevented many farmers from planting corn or wheat and those fields were planted with soybeans. Farmers also were encouraged to plant more soybeans because of its higher price compared with other crops, the Secretariat said.
India Announces New GM Import Policy
India has implemented new rules governing the import of genetically modified products and as a result some soyoil shipments from South America have been postponed. As part of its new foreign trade policy, the Indian government said last week that imports of genetically modified products will be allowed only with the approval of the Genetic Engineering Approval Committee (GEAC). GM products will also have to carry a “declaration” on their genetic status.
India’s Commerce and Industry Minister Kamal Nath said the government was establishing clear guidelines on import of GM material “for the benefit of consumers.”
U.S. Soy Exports To Mexico Likely To Increase In 2006-07
Mexico’s imports of U.S. soybeans likely will increase by more than 10% in 2006-07, according to USDA. The increase is mainly due to the strength of the Mexican economy, USDA said. USDA expects the Mexican economy to grow by 4.1% in 2006 and that growth is driving increased demand for meat products, largely because middle-income consumers tend to switch to meat as a preferred source of protein as incomes increase.
Mexican consumers also are consuming more products containing vegetable oils, particularly soybean oil, as rising incomes have stimulated demand for convenience foods and other vegetable oil derived products, according to USDA. Consumer demand for soybean oil is expected to increase by approximately 4% in 2006-07, said USDA.
However, domestic soybean production provides for only 4% of total consumption. Therefore, soymeal imports are expected to remain as livestock production expands and imports of soyoil are also likely to increase driven by changing dietary preferences.
Soy Complex Mostly Lower On Bearish Fundamentals And Strong Energy Markets
The soy complex closed mostly lower on April 20 reflecting bearish fundamentals. Recent price movements have been driven by outside markets as soybeans have followed the metal and energy markets and soyoil has been pulled higher by increased energy prices.May bean futures closed down $1.01 finishing at $209.90; July was $0.92 lower, closing at $215.04; and August lost $0.64 ending at $217.24. May meal was down $3.09, closing at $190.26; July was $2.87 lower, finishing at $190.48; and August decreased $2.31 to finish at $192.24. May oil closed $5.51 higher to finish at $532.19; July was up $5.51, closing at $540.57; and August gained $5.73, ending at $544.98.
