Australian Grains Industry Conference U.S. Grain Export Industry Structure July 28, 2010

Transcription

1 Australian Grains Industry Conference 2010 U.S. Grain Export Industry Structure July 28, 2010

2 North American Export Grain Association Private and Publicly Owned Companies and Co-ops Engaged in Bulk Grain, Oilseed Exports. Established in 1912 Foundation in Commercial Practices, Contracts and Advice to Governments, Non-tariff Trade Barriers Members ship vast majority of $60 billion+ annual exports of North American bulk grain, oilseeds and primary products Commitment by MEMBERS to: Integrity, Competition, Commercial Solutions, Open Markets Reliability, Customer Driven, Quality and Safety Priority 2 2

3 ADM Cargill Agrex - Mitsubishi FGDI CHS Zen-nohnoh Grain Toyota Tsusho Richardson Gavilon Rice Co Cam USA Pasternak, Baum Thionville Assoc. Terminals CoBank Port of Corpus Christi J&S / Dubai Columbia Marubeni TEMCO Blue Water Shipping Company Degesch America, Inc. Louis Dreyfus Bunge CLD Pacific Mitsui United Grain DeBruce Itochu Nidera Viterra United Harvest Giroski AGRO WestPlains Russell Marine Ghaznavi /Iran SGS Interstate Intertek AGREX, Inc. Glencore Kalama Export Star Trading & Marine Seaboard Overseas Ltd. American Kadi Home Export 3

4 GLOBAL FOOD DEMAND - Current Economic downturn impact on Agri-commodities? The economies of China, India, Pakistan, Indonesia, Nigeria, Ethiopia, Vietnam, The Middle East, among other countries and regions, are growing g faster than the world average Long Term Challenge Feed people p 7 billion in billion in billion in 2050 Will need 70% more food by 2050 (UN Projections, March and October 2009) 4

5 WORLD S LEADING IMPORTERS OF AGRICULTURAL COMMODITIES MMT, 2009/10 (Projected) Country/Region Amount Commodities N. Afr./ME WCG W,CG EU SB,CG,R China 45.0 SB,CG,W Japan 23.5 CG,SB Mexico 16.0 CG,SB SE Asia W S. Korea 7.6 CG Source: USDA, WASDE Report, Feb

6 Farm Land * per Capita, 2009 Entity Population (mil.) 1 A./Cap 2 World 6, China 1, India 1, U.S Indonesia Brazil Pakistan Bangladesh Nigeria Russia Japan Mexico Countries with more than 100 million population; 40% of world total. 2 Countries with less than 1/3 acre per person tend to be net importers. * The world is losing about 25 million acres of farm land per year; -.5%. Source: CIA World Fact Book. 6

7 Consuming Market Regions Region Development Stage Growth Rate China Late Intermediate Rapid India Early Intermediate Moderate East Asia Mature Slow West Asia Beginning Slow N. America Mature Slow C. America Beginning Slow S. America Late Intermediate Moderate European U. Mature Slow Middle East Late Intermediate Rapid Africa Beginning Slow Central Asia Beginning Slow 7

8 Trends? More Ag Production must Move Internationally LAND OECD Countries 26% Africa 11% East Asia and the Pacific 14% OECD Countries 14% South Asia 22% Africa 11% East Asia and the Pacific 31% South Asia 15% Middle East and North Africa 4% Europe and Central Asia 20% Latin America and Caribbean 10% PEOPLE Middle East and North Africa 5% Latin America and Caribbean 9% Europe and Central Asia 8% With population growth, urbanization and broad based economic development, many low income countries food consumption will outstrip their production capacity, and they will become larger net importers. 8

9 Trade 3rd China Agribusimess Summit April

10 mln t World Grain Trade follows Consumption 283 plus 44 mln tons (18 %) in ten years USDA

11 mln t 120 World Oilseeds Trade follows Consumptionplus 27 mln tons (34 %) in ten years USDA

12 World Bulk Grain Systems The grain industry s challenge = move commodities from areas of surplus to areas of deficit, provide for regulatory compliance, safety and cost efficiency Movement is bulk and comingled months contract to delivery dli lead time Characterized by high volumes, low cost Impossible to keep varieties totally separate in system Commingling may occur in each link of chain Adventitious events may occur in all shipments of all commodities

13 Food and Feed Safety concerns Global l Dilemma 1) Adventitious presence of events in all transboundary shipments bulk, comingled, fungible commodities (both GM and non-gm) - Includes shipments from countries that do not have GMO s in commercial production. 2) Zero and impractical tolerance for unapproved events that are approved (i.e. found safe) first in exporting countries and not in importing countries. 3) Trade is often restricted or prevented - Identity Preservation systems and grain channeling not successful or practical to meet zero or testing limits based tolerances

14 Grain Export Facts Global supply chains cannot manage to a zero tolerance Practical and achievable standards need to be incorporated in contracts Testing is a tool but not the sole answer Contract sanctity is of paramount importance

15 Goal: National Policies that minimize impacts of Food Safety and Labeling regulation on trade of commodities for FFP 1. Develop risk assessment policy that minimizes asynchronous approval gaps between trading partners 2. Establish policies for agricultural biotechnology that create access and predictability for global supply chains 3. Acknowledge the need for and support the development of practical and achievable standards for LLP (low level presence or adventitious presence) Crop Life Korea LLP Workshop - January

16 Trade Negotiations Multi lateral DOHA Bilateral U.S. Australia Regional Trans-Pacific Partnership

17 WTO DOHA Stocktaking March 2010 Maintain and strengthen centrality of multilateral dimensions of these negotiations Build on what is already on the table Development remains a core principal

18 Bilateral FTA s U.S. Australia concluded in 2005 has resulted in over 50% increase in two-way trade of $32.8 Billion in U.S. FDI in Australia was $88.5 billion in 2008 and Australia FDI in the U.S. was $64.5 billion

19 Current U.S. Situation Three major FTA s await Congressional approval Colombia (2006) Korea (2007) Panama (2006) Labor interests in the U.S. seek new modifications to these agreements The rest of the world is aggressively pursuing treaties without us.

20 Regional Agreements NAFTA has been a positive model for what can result from increased trade liberalization Effective January 1, 1994 Eliminated Non Tariff Barriers Most tariffs eliminated immediately with others phased out by January 1, 2008 Created the world s largest free trade zone of $17 trillion worth of goods and services covering 444 million people

21 Trans-Pacific Partnership USTR notified U.S. Congress of intent to enter into regional Asia-Pacific Trade Agreement in 2009 First round of negotiations in Melbourne March 15 19, 2010 Second round June 14 18, 2010 in San Francisco USTR conducting 50 state outreach

22 Trans-Pacific Partnership Cont. Most recent negotiating session focused on four goals: Architecture for market access negotiations Relationship between the TPP and existing FTA s among the negotiating partners Horizontal issues such as small business priorities and regulatory coherence Process for tabling text leading up to the next meeting in Brunei in October

23 Conclusions Increased demand d for food security will continue to require adoption of new technologies and stronger supply chain linkages Disguised trade barriers add to costs and impede actions to meet food security challenges Trade regulatory frameworks must be adopted to facilitate more liberal trade.

24 Thank You! W. Kirk Miller, Senior Advisor New Technologies and Trade North American Export Grain Association