Wheat is displayed for judging at the Cedar County Fair in Tipton, Iowa. [Image Source: Scott Olson/Getty Images]

US Grain Exports To Southeast Asia Continue to Grow

Asia ASEAN The Mekong

Headlines around the world have been captured by the partial government shutdown in the United States and the threat of a debt default. However, below the surface of the stormy waters, the quiet work of building economic ties between it and Southeast Asia continues. That includes US exports to the region, which make a crucial difference to jobs and incomes back home. An example is seed grains. It is hardly a glamorous export, but important to the US economy. It was announced at the end of September that exports of distiller's dried grains with solubles (DDGS) had been a bright spot in a tough year for US feed grains, with the Southeast Asian market setting the pace.

Through the first half of calendar year 2013, total US DDGS exports were up six per cent, but those to Southeast Asia saw a rise of nine per cent. Providing a breakdown, the US Grains Council says on its website that major gains in Thailand (up 53 per cent) and Indonesia (up 42 per cent) more than compensated for declines in Malaysia and the Philippines. Overall, US exports to the region were up 605,000 metric tons. “In Southeast Asia, DDGS are a beachhead export commodity for the United States,” notes Adel Yusupov, the council’s regional director in Southeast Asia. “While India and South America are our major regional competitors in coarse grains, DDGS is a key product where the United States commands a significant advantage due to its unique mix of quality feed protein and energy benefits for poultry and swine,” he says on the website.

“Southeast Asia's commercial feed production, currently at 60 million metric tons, is about one-third of China's and growing at five to eight per cent per year, driven by consumers' preference for higher-value calories. We are working to tap into these markets and build demand for DDGS across all animal sectors,” he adds. There have been problems. US DDGS shipments came under a shadow last year following the discovery of insect pests in a container shipment to Vietnam. But, Mr Yusupov says, the council responded quickly with an effort that led to a mutually-satisfactory arrangement with Vietnam on inspections and fumigation. This permitted the trade not only to resume but also to grow.

Exports continue to play an essential role in the US economy. According to the Census Bureau, US sales abroad increased by 4.4 per cent to a record $2.2 trillion in 2012. On US-ASEAN relations, the Office of the United States Trade Representative reports that in 2012, US goods trade was $198 billion, up from $145 billion in 2009, making the grouping the fourth largest US export market and fifth largest overall trading partner. In 2011, trade in services with ASEAN countries totaled $30 billion, with exports of $19 billion and imports of $11 billion, thus giving the United States an $8 billion services trade surplus with regional countries.