Young Indian Population Creates Growth Opportunity for U.S. Soy in Asia Subcontinent
India, Pakistan, Bangladesh, Sri Lanka and Nepal collectively make up the geographic region known as the Asia Subcontinent. U.S. Soybean Export Council (USSEC) Deputy Regional Lead – Asia Subcontinent, Vijay Anand, explains that while this region is relatively new to using U.S. Soy, its population’s increasing consumption of meat has made it a thriving market with lots of growth potential.
Q: What is the history of U.S. Soy in the Asia Subcontinent (ASC)?
A: There wasn’t much U.S. Soy in our market a decade ago. The first imports of it came in the form of soybean meal to Bangladesh and Sri Lanka; these were the first ASC countries to experiment with U.S. Soy. Then Pakistan started following suit and importing a lot of U.S. Soy. Nepal is a small, landlocked market, which means we have an Indian port where the U.S. Soy arrives and has to go up the mountains to reach the target. India is a larger market, but currently we have some policy constraints about bringing U.S. Soy into the market. Less and less Indian meal is being exported, which means more U.S. soybean meal is needed to fill those gaps.
Q: When it comes to animal agriculture, what ASC sector uses the most U.S. soy?
A: Poultry is the biggest user of U.S. Soy, followed by aquaculture. We have Muslim countries that do not consume pork. India is based on Hinduism so they do not eat beef for religious reasons, but pork is also not popular. Poultry is the most popular socially, culturally and financially, followed by aquaculture.
Q: In addition to the religions you mentioned, tell us a little about the demographics of this region.
A: We have 1.6 or 1.7 billion people in the region. The economy is growing fast. But age is one of the most noteworthy demographic factors. When you look at the population of this entire region, 50 percent are below the age of 27. So that becomes an important driving factor, because a young generation is health-conscious and has more disposable income – two big drivers for change when it comes to consumption of meat. This young, growing middle class is going to spend its money on food. Food comes first, then luxuries come after that – the house, the car, the refrigerator. USSEC and U.S. Soy as a whole are directly connected with food and protein, meaning there’s lots of opportunity on both ends.
Q: What do you hear from ASC buyers about their reasons for choosing U.S. Soy over competitors?
A: The main thing they look for is the quality; not just protein, but also amino acids and the amount of energy U.S. Soy can provide from carbohydrates that get converted to energy. Anybody who formulates feed or raises animals values energy even more than protein because the energy is the most costly ingredient. That’s something that a formulator or a buyer is going to jump at. If he wants to buy on energy he would choose U.S. Soy because it’s giving him more energy. But that’s not the only factor. There are customers who say the phosphorus levels are good in U.S. Soy. There is ease of trade with U.S. Soy. Contracting is easy. They feel very comfortable with the trade process. Customers say the quality is uniform and the supply is very sustained. We don’t have gaps in our production. They highlight all these points as advantages of U.S. Soy.
Q: How does USSEC support crushers and buyers in the ASC?
A: We serve several different types of customers. Mainly, our targets are soy crushers. We teach them to buy U.S. soybeans and crush them better to produce soybean oil and soybean meal. We teach them how U.S. Soy is going to perform better and get them better profits, better production and better return for their investments.
Q: People often describe India as “The Next China” in terms of its usage of U.S. Soy. What do you think of this comparison?
A: When you compare China and India, the gaps between Chinese volume and Indian volume are large. India is second on the list, behind China. We have to move more soy into the market and we’re seeing it happen. We have a lot of bureaucracy in India because it’s a peoples’ market, so we cannot get change as fast as the Chinese government can. But India and the ASC market is a big market – second in the world. This is a growing market; consumption levels are low and there’s room for growth.
Q: What does the future of U.S. Soy look like in the ASC?
A: It’s an exciting time for U.S. Soy. There’s a lot of transformation happening in our region. We are still on a great learning curve. This is a time we can impart the best education and value on our customers and see the potential. Our region has typically relied on India as its sole supplier of soy. It’s the right time to have this dialogue with U.S. Soy because the industry has been a sustainable supply for them. All the quality and trading advantages are being recognized by our customers only of late. There’s real hunger to look for suppliers to sustain their business. That’s why it’s the right time.