Two factors have contributed to the present tumble in the world economy – the US-China trade tussle and the ongoing impact of Covid-19. Both have backed a sharper focus on inward looking economic policies, self-reliance in food production, and regional centric trade.
China’s harsh stance has had an impact on trade with Australia with four meat plants banned from exporting beef to China and barley exports likely to incur higher tariffs.
Across the Pacific, the US has carped that China has not fulfilled their grain purchase commitments. Soy farmers meanwhile are bemoaning the instability the trade war has dealt, that has weighed in heavily on soy prices.
That said, the mood was upbeat at the Asia Trade Exchange 2020 hosted by the US Soybean Export Council last week. In his opening speech US Secretary of Agriculture Sonny Purdue emphasized that global trade remains critical to the health of the US rural economy, while contributing to the wellbeing of farmers throughout the world. “We offer reliability and a consistent supply that we can be counted on to deliver.”
US Grains Council, Regional Director for Southeast Asia, Manuel Sanchez said US corn exports have been picking up since May. Highest demand came from Asean and East Asian countries such as Japan, South Korea and Taiwan. These economies have rebounded faster than the rest from Covid-19, projecting greater demand for animal feed.
With geo-political tensions simmering, economic protectionism is rising, favoring a domestic and regional orientation.
While in Indonesia SMARTernak is helping cattle farmers with precision livestock farming that helps farmers manage their animals more efficiently, the Philippines has turned to Indonesia’s Seger Agro Nusantara for 6300 tons of corn, valued at USD 3 million. In early June, the company exported 6100 tons of the grain to the same destination.
Thailand and Vietnam in the meantime have endorsed live pig trade protocols allowing only farms that are GAP-certified to export commercial pigs to Vietnam. Dr Wacharapon Chotiyaputta, Director of Division of International Livestock Cooperation told Asian Agribiz that both countries have finalized qualifications of pig farms and quarantine procedures and agreed on a list of disease and feed additives that pigs for export must be free of.
Cross-border trade is also the focus of Cambodian farmers who are raising their game and growing feed corn for export to Thailand. According to the Ministry of Agriculture, Cambodian farmers are adopting new technology and cultivation that has helped raise annual output.
Singapore’s pig imports from Indonesia this year has earned the latter USD 31 million from January-May 2020. The exports were by Indotirta Suaka of Salim Group with pig farming facilities in Bulan Island.
In India, the state government of Jammu and Kashmir is supporting the development of its poultry industry with a USD 2.7 million annual subsidy for parties interested in establishing broiler/layer farms and other allied activities. The program aims to attract large scale broiler producers to invest in the state.
Across in Bangladesh, the government is aiming to support the poultry sector with tax reductions on poultry feed and farm machinery, plus the removal of the 5% import duty on soy cake and the customs duty of 10% on soy protein concentrates to reduce animal feed costs.
As governments project the need for self-reliance and resilience, livestock producers appear to be reconfiguring their supply chains to secure consistent production and profitability. This offers us an insight into challenges and changes ahead of us.
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