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U.S. Exports and Imports
Major Foreign Soybean Exporters and Importers
Trade Policies
World oilseed trade consists of many closely substitutable
commodities, such as soybeans, rapeseed, sunflowerseed, and cottonseed. Countries
also trade oils and meals obtained from crushing oilseeds. Foreign import demand
depends on the difference between countries' domestic oilseed output and
consumption. Divergent demand for protein meal and vegetable oil, as
well as limits on domestic processing capacity, determine the ratio of oilseeds
to oilseed products that countries import. The volume and source of foreign
imports depends on seasonal availability and relative prices, credit and delivery
terms, local preferences, and quality. Country policies, such as tariffs
and domestic subsidies, also can affect prices and the availability of
competing products. USDA's Foreign Agricultural Service (FAS) monthly report Oilseeds:
World Markets and Trade presents forecasts and historical data by country
for the major oilseeds and their products, covering production, domestic
consumption, and international trade.
U.S. Exports and Imports
The United States is the world's largest producer and
exporter of soybeans. Oilseed and oilseed product exports,
particularly soybeans, represent a significant source
of demand for U.S. producers and make a large net contribution
to the U.S. agricultural trade balance. Among all U.S.
agricultural products, only grains and feeds outrank
the oilseed sector in total export value and volume.
In the early 2000s, the value of U.S. oilseed and product
exports averaged over $9 billion, nearly half the farm-level
value of production. By the late 2000s, the value of
oilseed and product exports doubled to over $20 billion. Outlook
for U.S. Agricultural Trade provides the latest
information on U.S. farm exports, by commodity and
region, as well as the trade outlook. Current U.S.
export sales of soybeans, soybean meal, and soybean
oil are tracked by destination on a weekly basis.
Main export destinations for U.S. oilseeds, oilseed meal, and
vegetable oil include China, the European Union (EU), Japan, Mexico,
and Taiwan. Other important markets include Indonesia, South Korea,
and Thailand. Canada, Mexico, the Philippines, and several Latin
American countries also import significant quantities of U.S. oilseed
meals. U.S. vegetable oil exports are more dispersed and are heavily
influenced by concessional food aid to developing nations through
such programs as P.L.
480.
U.S. imports of oilseeds and oilseed products were worth $3-4
billion in the late 2000s, and are mainly rapeseed and rapeseed
products (e.g., canola oil) from Canada, olive oil from Western
Europe, and tropical oils from the Philippines, Indonesia, and
Malaysia. FAS' Global
Agricultural Trade System (GATS) can
be used to search for statistics on U.S. exports and imports of
oilseeds and oilseed products by country or region.
Despite
substantial growth in oilseed and oilseed product output in the past 25 years
and recent gains in export volume, the U.S. share of global exports has steadily
diminished. In the mid- to late 1970s, the United States dominated world trade
in unprocessed oilseeds, with a global market share of more than 70 percent. Recently,
this figure has fallen below 50 percent. From a smaller percentage base, the United
States has seen its share of oilseed meal and vegetable oil exports decline even
more sharply, particularly before 1990.
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While soybean exports from the United States have grown over the
past 25 years, the share of U.S. exports in global oilseeds trade
has declined. A key development has been the phenomenal growth
of foreign soybean output and exports, particularly by Brazil
and Argentina. Foreign soybean output now exceeds that of the United
States, and Brazil and Argentina currently share more than half
of the soybean export market, up from less than 15 percent before
1980. With increased soybean production and rapid growth in crushing
capacity, Brazil and Argentina have each surpassed the United States
in soy meal and soy oil exports. Another factor is the recent expansion
of U.S. meat exports, which stimulates domestic meal use rather
than exports of soybeans or soybean meal. Brazilian and Argentine
soybean and meal exports are projected to continue capturing market
share from the United States in the next decade.
Major Foreign Soybean Exporters and Importers
Since the early 1970s, soybean production in South America
has expanded rapidly. Brazil now trails only the United
States in soybean production. Brazilian
soybean growing regions used to be concentrated in the south, relatively near the major ports. In recent years, soybeans have expanded into the vast farmland of the center-west states, as infrastructure improvements have cut internal transportation costs. Brazil's vast reserves of farmland could permit a continued significant expansion in soybean area, though expansion is currently limited due to insufficient transportation infrastructure. Argentina's soybean growing regions and crushers are located close to port facilities, where the country's highly developed crushing industry and relatively small domestic market makes it the world's largest exporter of soybean meal and oil. A lower export tax on processed commodities than on unprocessed commodities also favors the export of soybean oil and meal from Argentina. Recent increases in production by Argentine and Brazilian grain and oilseed producers
could foreshadow continued gains on the strength of abundant undeveloped agricultural resources, more stable economies, and expanding trade liberalization (see Agriculture in Brazil and Argentina: Developments and Prospects for Major Field Crops).
China is the world's fourth-largest producer of soybeans.
The major Chinese
soybean growing regions are in the northeast part
of China. Yet, rapid growth of China's economy has spurred
food consumption, turning the country into the world's
leading soybean importer. Changes in China's
agricultural and trade policies have greatly influenced
world oilseed markets (see China's New Farm Subsidies). China's
WTO accession has reduced import tariffs and
quantitative restrictions to its oilseed market.
The major Indian
soybean growing region is in the central state of
Madhya Pradesh. Indian production of soybeans and other
traditionally grown oilseeds—such as peanuts, rapeseed,
and cottonseed—has increased in the last decade,
although yields are among the world's poorest. India often imposes prohibitive barriers on oilseed imports, so its domestic crushing industry relies on domestic oilseed supplies. Domestically produced oilseeds are highly valued sources of vegetable oil, but domestic consumption has risen faster than domestic production so that India
is now among the world's largest vegetable oil importers (see India's Edible Oil Sector: Imports Fill Rising Demand).
India is a smaller (but growing) consumer of soybean meal, and exports its surplus to other Asian countries.
The European Union is self-sufficient in vegetable oil
production, but its protein deficit still makes it the
world's largest importer of soybean meal and second-largest
importer of soybeans. Since the 1960s, EU imports of
soybeans swelled because of rapid growth in livestock
production and duty-free concessions signed in trade
agreements. In the 1970s and 1980s, soybean consumption
slowed as EU agricultural policies subsidized a large
expansion in domestically produced rapeseed and sunflowerseed,
eroding the market for oilseed imports. The U.S. Government
challenged these subsidies and, in 1992, the EU committed
to a number of reforms of its Common Agricultural Policy
(CAP), including area limits on the planting of oilseeds. Further
CAP reforms reduced per-hectare direct payments
to oilseed producers to those received by grains producers.
Until 2005, reforms encouraged EU farmers to scale back
oilseeds planting. However, recent EU biodiesel policies
have encouraged EU farmers to dramatically increase
oilseeds area, especially rapeseed.
In coming years, EU enlargement and CAP reform are projected
to swell internal grain supplies and allow EU grain prices
to fall even more. Despite relatively low protein-meal
prices, the comparatively larger reduction in the cost
of feeding grains to livestock should curb EU soybean
meal consumption and imports. Historically, high import
tariffs on cereals have boosted EU consumption of soybean
meal, which has been favored by duty-free access for soybeans.
Over the last decade, lower grain prices and several animal
disease epidemics resulted in significant increases
in the feeding of grains and oilseed meals and a reduction
in the feeding of nongrain feed ingredients, such as meat
and bone meal (see Livestock Feeding and Feed Imports in the European Union—A Decade of Change).
Under the North American Free Trade Agreement (NAFTA),
Mexico phased out its tariff on soybeans and canola
by 2003. With reforms in Mexico's domestic crop support
programs, imports have virtually displaced domestic
soybean production, with nearly all imports coming from
the United States. U.S. soybean exports to Mexico have
more than doubled since 1993. Strong income growth among
Mexican consumers has boosted consumption of meat and
vegetable oils and increased demand for soybeans. Improvements
in Mexico's rail links at the border have also expedited
trade in oilseeds. Imports by Mexico are primarily
seed, which are crushed domestically.
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Trade Policies
Compared with trade in other agricultural commodities,
trade in whole oilseeds, particularly soybeans, is relatively
unrestricted by tariffs and other border measures. But
oilseed meals, and particularly vegetable oils, typically
have higher tariffs. Agricultural
tariff schedules for World Trade Organization (WTO) member
countries report the current maximum permissible duties.
In addition to tariffs, both exporters and importers
have used other trade-distorting policies, such as differential
export taxes in Argentina and in Brazil (prior to 1996),
production subsidies in the EU, and phytosanitary
barriers in India. These policies create incentives to
boost domestic oilseed production or encourage exports
of processed products, which tend to displace U.S. oilseed
exports and shift the composition of U.S. exports towards
whole oilseeds and away from higher value-added oilseed
meals and vegetable oils.
The Doha round of WTO negotiations began in 2001 and
is still ongoing. Among other issues, negotiations are
focusing on issues previously addressed by the Uruguay
Round Agreement on Agriculture (URAA), such as limits
on tariff and nontariff barriers to trade, export subsidies,
and the type and level of spending by countries on domestic
agricultural support programs. These provisions limit
member countries' use of trade-distorting policies. U.S.
objectives for future
negotiations include
further reducing tariffs and improving market access,
eliminating the use of export subsidies, and further
limiting trade-distorting domestic programs. Analyses
of U.S.
Tariff-Rate Quotas for Peanuts have
also shown their significant influence on U.S. peanut
imports, particularly prior to the elimination of the
peanut marketing quota system in 2002 (see Peanut
Policy Change and Adjustment Under the 2002 Farm Act).
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