Solvent extractors, representatives of the poultry industry, and other potential buyers of soybeans from around the world including Pakistan gathered in San Francisco last week for Soy Connext, an event meant to connect buyers from around the world with soybean farmers from the United States.
The event comes in the midst of a bumper crop in the US, with farmers expecting to produce 4.6 billion bushels of soybeans for the 2024/25 crop and supply estimates up 11% over last year according to the United States Department of Agriculture (USDA). As a result, the prices of US soybean are expected to be relatively low this year, offering an interesting opportunity for buyers, particularly those in the Global South. There is a high demand for quality oilseeds in South Asia where they are an important component both in the edible oil and poultry industries.
The event was organised by the U.S. Soybean Export Council (USSEC), which hosted representatives from 62 countries in San Francisco including Pakistan, Bangladesh, India, Nepal, China, Egypt, Indonesia, Japan, and Mexico. The attendees represented a range of markets from mature to emerging.
A number of prominent players from Pakistan’s solvent extraction and poultry feed industries were also present at the event. Among the representatives from Pakistan were Mian Muhammad Ahmed, the CEO of Ali Daniyal Industries and Chairman of the All Pakistan Solvent Extractors Association, Mian Shakil Ashfaq of Shujabad Agro Industries, Muneeb Monnoo of the Olympia Group, Nabi Bukhs of MA Oils and Sind Feeds, and Sikander Ali Khan of SS Oil Mills.
“It’s truly a humbling experience to bring so many key customers from around the world together to meet with U.S. exporters and expand their understanding of the value U.S. Soy offers,” said USSEC Chair Lance Rezac, a soybean farmer from Onaga, Kansas. “Compared to recent years, the price is right for buyers to benefit from U.S. Soy’s many advantages.”
Significant imports
Pakistan is a significant importer of oilseeds, which are a basic caloric component for most people. Oilseeds such as soybeans are crushed to produce edible oil, and the leftover material from this crushing is used to produce “meals” which is used as feed for poultry in Pakistan. According to a State Bank Report from 2021, Pakistan’s total imports of oilseeds (including palm oil in various forms) were rising and had gone over $4 billion.
The import market in Pakistan has been plagued in recent times by a number of issues. Back in December 2022, around $300 million worth of soybean (some of them imported from the US) were stuck at Port Qasim because of an issue regarding the GMO status of the product.
With slow recovery in the poultry sector and sluggish demand for edible oils, no significant growth was seen in Pakistan’s total oilseed use for 2022-23, according to a report from the Foreign Agricultural Service of the US Department of Agriculture (USDA).
Use is estimated at 6.4 million tonnes, a 3% increase from last year. Most oilseeds are used for crushing, including rapeseed and sunflower seed for oil production. Crushing to produce meals drives soybean demand and the poultry industry is the primary user.
A good time to buy
While soybeans are sold as a commodity oilseed, research continues to show that soy from the United States is a premium product that increases operational efficiencies for livestock farms, feed mills, and oil crushers.
“It’s truly a humbling experience to bring so many key customers from around the world together to meet with U.S. exporters and expand their understanding of the value U.S. Soy offers,” said USSEC Chair Lance Rezac, a soybean farmer from Onaga, Kansas. “Compared to recent years, the price is right for buyers to benefit from U.S. Soy’s many advantages.”
“We’ve all heard the phrase ‘knowledge is power,’” said Jim Sutter, USSEC CEO. “At Soy Connext, we’re unveiling some of the newest data we have available.
“We’ve long known that U.S. Soy offers a superior nutritional package, but we’ve not been able to quantify it in a way that’s meaningful to buyers. Today, we’re demonstrating that it’s possible, based on our modelling, that livestock farms using 100% U.S. soybeans in their feed formulations can unlock $3 million in profits.”
In a press release, the USSEC said their modeling is based on a broiler operation producing 50 million chickens annually. Sutter added, “USSEC’s technical experts around the world are meeting with customers to help them understand the differences between U.S. Soy and soy of other origins and the effect those differences can have on feed conversion ratios — a huge economic impact over the course of a year.”
