Growing Asian markets

DESPITE THE SHOCK of an immense earthquake and its destructive aftermath in Japan on March 11, a food grade soybean mission held there during that time by the Canadian International Grains Institute (CIGI) and the Canadian Soybean Council (CSC) was considered a success.

“Japan is Canada’s number one customer, a premium market focused on high-quality non-GM food grade soybeans, so this visit was part of an effort to enhance what has become a strong relationship between us,” says Dr. Linda Malcolmson, CIGI Manager of Special Crops, Oilseeds and Pulses. “Canadian soybeans are important to the Japanese, and Ontario was instrumental in developing Canada’s relationship with Japan by meeting the needs of their market and becoming our largest soybean growing area, she says.”

The visit to Japan as well as to Thailand and Vietnam from March 9 to 17 included one representative from CIGI and three from CSC, including a soybean producer each from Ontario and Manitoba. The group was also joined by members from the Canadian Soybean Exporters’ Association (CSEA) representing seven Canadian soybean exporting companies.

Canada’s strengths have been its identity preserved (IP) system, integrated value chain, progressive soybean breeding research programs and sophisticated production practices.  Japan imported more than 350,000 tonnes of Canadian food grade soybeans in 2009.  “A number of CIGI-CSC Japan-Canada soybean programs that have been held in the past several years have also gone a long way to help build our relationship through education about Canada’s soybean industry and face-to-face discussion, says Malcolmson.”

assuring expansion
CIGI?and CSC?held a seminar in Tokyo on March 10 and attracted 140 Japanese soybean importers and processors, the largest number ever, says Malcolmson. The message of the seminar this year was primarily about the expansion of soybean production in Canada and ensuring the Japanese that Canada is still committed to producing non-GM soybeans.

For 2011-12 Canadian soybean production is estimated to reach 4.3 million tonnes, or 24 percent more than in 2009. Most production is in Ontario and Quebec where 35 percent and 51 percent were non-GM soybeans, respectively, in 2010.  Prince Edward Island and Manitoba have steadily increased production but with a greater percentage of GM soybeans.

“Dialogue with the Japanese processors helped address any concerns they had,” Malcolmson says. “They are much more knowledgeable now about our industry so it is important to provide them with the information they need.”

Malcolmson adds that she and the other Canadian representatives were told by the Japanese at separate industry meetings that they were impressed with how Canadian industry producers, exporters and researchers have responded to their requests over the past few years. “They also indicated that they would be willing to meet with our researchers who are tentatively planning a trip to Japan to learn more about future quality requirements to help set breeding objectives.”

overcoming natural disasters
On Friday, March 11 the Canadian delegation was just finishing their tour of the Takano natto processing plant located northeast of Tokyo when the 9.0 earthquake struck. The group departed soon after but it took 17 hours to travel the 80 kilometres by bus back to Tokyo. Flights out of Tokyo were cancelled so the trip to Bangkok was delayed and the CSC?and CIGI?industry seminar there had to be rescheduled.

thailand bound
After the stresses of cancelled ground and air transportation, and continuous aftershocks in Japan, the group was glad to finally reach Thailand. The visit, a first for CSC, aimed to increase awareness of Canadian soybeans and the capabilities of the industry. Between 2007 and 2010, Thailand increased Canadian soybean imports from about 12,000 to 24,000 tonnes.

“Importing Canadian soybeans is newer for them,” Malcolmson says, noting they are used primarily for producing tofu and soymilk. “Not all processors are looking for high-quality or non-GM soybeans. But at the same time there is an opportunity for a higher-quality soybean market as manufacturers begin to look at differentiating their products from their competitors’ products.”

new markets in vietnam
After the stop in Bangkok the group travelled to Vietnam where they held a seminar in Ho Chi Minh City. Malcolmson observed that since her visit in 2008 their industry has changed remarkably. “The last time they talked a lot about small operations to produce tofu and soymilk, but this time we heard more about industrial production. We  saw that the country had advanced rapidly and Ho Chi Minh City was in the midst
of transformation.”

Vietnam also imports soybeans from the US, China, Argentina, United Arab Emirates, India and Cambodia, but Canada’s high quality will be an advantage in this market down the road. In 2010 Vietnam imported 200,000 tonnes of soybeans, which includes both crushing and food grade soybeans, and that amount is expected to more than double with the opening of two new crushing plants.

“I think Vietnam has the potential to become an important market for us,” Malcolmson says. “They are beginning to put more emphasis on quality. Some of those companies are exporting their final product into Europe or other parts of Asia where there are higher quality requirements and their society is also becoming wealthier.”

Asia will continue to be Canada’s top destination for our food grade soybeans, Malcolmson says. “As each individual market changes and evolves, so too does our need to respond to the customer’s needs to ensure we continue to be successful in these markets.” •