This is part of a series of snapshots from around the world with the U.S. Soybean Export Council (USSEC). U.S. Soy has a presence in key markets around the world, and this series aims to showcase the importance of U.S. Soy in these unique markets in 2018 and beyond. USSEC is a partnership of key stakeholders representing soybean producers, commodity shippers, merchandisers, allied agribusinesses and agricultural organizations that help to build a preference for U.S. soybeans and works to optimize the utilization and value of U.S. Soy in international markets by meeting the needs of our stakeholders and global customers.
Market snapshot:
- With a total population of 645 million and a population growth rate between .08 and one percent annually, over six million people are added to Southeast Asia’s population each year.
- Last year, over 275 million bushels of U.S. soybeans were exported to this region.
- This area is a large customer for soybean meal. Customers here choose U.S. Soy and are willing to pay a premium for U.S. soybean meal because of its better quality and consistency.
- Aquaculture is a key area of growth, both for soy-based aquaculture as well as aquaculture infrastructure improvements.
With a growing middle class, Southeast Asia is a strong market that consumes large amounts of U.S. Soy and soybean products.
Meat production is on the rise here, largely due to the population’s growing disposable income. In fact, Southeast Asian consumers are projected to increase meat consumption by as much as three percent annually for the next seven years. That’s a big opportunity for feed suppliers. U.S. soybean meal provides exceptional compositional quality and nutrient density, which includes the combination of digestible essential amino acid levels plus nutritional energy levels for animals.
“We are always looking for what adds value,” says Dr. Soon-Bin Neoh, managing director of Soon Soon Group in Malaysia. “For feed, we are looking for the essential functionality such as protein [and] energy, which is what animals need to grow.”
Import Markets
Southeast Asia represents a growing market for U.S. Soy, as exports have grown between seven and eight percent year over year consistently for the last three years, surpassing the average regional feed industry growth of four to five percent. Last year, over 275 million bushels of U.S. soybeans were exported to Southeast Asia. Myanmar is one of the top destinations for containerized U.S. soybean meal shipments, and Indonesia is the third largest whole soybean importer from the U.S. Last year, the Philippines took over from Mexico as the largest U.S. soybean meal importer, purchasing 1,875,197 metric tons (MT).
USSEC Regional Director – Southeast Asia Timothy Loh says, “They [Southeast Asia end users] look at the total quality that is provided by U.S. Soy. And when I say total quality, [that refers to] the quality of the product, the consistency of the product, [and] the logistic superiority the U.S. has in terms of delivering the product to the destination countries.”
Domestic Growth
With three times more coastal and maritime borders than its landmass, aquaculture is a key area of growth.
Indeed, much of the world’s aquaculture is produced within this region. More specifically, 36 percent of the world’s catfish is produced in Vietnam. Meanwhile, 42 percent of the world’s shrimp comes from Thailand and 33 percent is supplied from Indonesia.
Southeast Asia is an incredible market for soy-based aquaculture and aquaculture infrastructure improvements, such as In-Pond Raceways, which are systems constructed in existing freshwater ponds that simulate a river. This allows water to flow continuously and results in better farm and health management, through the recycling of water and the removal of waste for use in the production of crops.
Southeast Asia is also a top pork and broiler producer. Thailand, Malaysia, Indonesia and the Philippines all rank in the top 20 countries for broiler production and in the top 20 countries with the highest growth rate in broiler production. The Philippines and Vietnam are both top 10 producers of pork, producing 2,750 and 1,610 thousand metric tons (TMT), respectively, according to the U.S. Department of Agriculture Foreign Agricultural Service Forecast from August 2017. Feed production has been growing at a strong rate of an average of 8 to 10 percent over the last couple of years.
In addition to livestock demand, direct-to-consumer sales are also prevalent in this region. In Vietnam, commercial food production has more than doubled since 2005. In Indonesia, the fourth largest importer of whole U.S. soybeans, more than 92 percent is used to produce tempeh, a traditional native dish that binds soybeans into a cake-like form. Thailand has the largest and most sophisticated soy food and beverage industry in the region.
