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U.S. export potential in China promising, strong in Japan, Taiwan

There is promising potential for U.S. grains exports to China while sales to Japan and Taiwan over the years have been steadily growing, according to Cary Sifferath, U.S. Grains Council’s senior director in China and former country director in Japan, and C.M. Lynn, director of the Council’s Taiwan office.

Both gave market outlook reports to approximately 200 people attending the council’s 48th annual board of delegates’ meeting in Anchorage, Alaska.

“There are many forces to watch in regards to China’s feed grains transition,” Sifferath said. “The Chinese government is engaged in a balancing act. They want grain prices to be as low as possible in order to keep food inflation to a minimum, but at the same time they are trying to keep prices high enough at the feed level so as to encourage farmers to continue producing,” he said.

Currently, the government has restricted grain exports to everywhere except Taiwan, which is considered a domestic market, and North Korea. But with China experiencing significant economic growth and growing urbanization, demand for pork, milk, vegetable oil and poultry are increasing, and that means the country’s need for grains is as well.

As for the market outlook for Japan, U.S. barley producers continue to enjoy a large market share. “The United States had a good year in 2007, and so far we’re having another good year in 2008,” Sifferath said.

From January to May of this year, Japan imported 254,000 metric tons (12 million bushels) of U.S. barley out of a total 655,000 tons (30 million bushels) imported.

Sales of U.S. distiller’s dried grains with solubles (DDGS) to Japan are also growing at a steady pace.

In May, 23,000 tons were sold to Japan and according to Sifferath, the United States can expect to continue to export DDGS at a pace of 20,000 tons per month. So far this year, Japan has imported nearly 84,000 tons of U.S. DDGS.

Feed grain exports to Taiwan have also continued to grow over the years. In 2006, U.S. exports peaked at 5.2 million tons compared to 1.5 million tons in 1973 when the council first established a presence in the country.

Lynn said sales have decreased in the past year, but the U.S. market share has remained steady. “Although we’ve seen a slight decrease, the United States still enjoyed a 96 percent market share in 2007,” he said.

TAGS: Outlook
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