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ASA leaders urge Argentina to commit on India soy agreement

Agriculture.com Staff 01/18/2007 @ 7:08am

ROSARIO, Argentina -- The time is now for soybean producers in North and South America to get serious about opening up the India market, American Soybean Association leaders told the U.S. Ambassador in Argentina on Wednesday.

Initial agreements, given the name Global Grower Development Agreements (GGDA), were made with Brazil, Paraguay and Argentina in 2006. The goal of the GGDAs are to remove trade barriers with India, a country that currently doesn't import whole soybeans.

However, because its population is second largest in the world and expected to surpass China in numbers by 2040, India is expected to be a net importer of soybeans in less than three years, according to ASA officials.

ASA sees momentum in opening up India's market as critical and will be fueled by information-sharing and discussions.

Steve Censky, ASA chief financial officer, said the U.S. wants to make sure when India opens its borders to soybeans, there is no trade barriers pitting North America and South America farmers against each other.

"Neither continent has the India market right now, so it's not like one of us has to defend this market. We can go at it together and it will benefit U.S producers and South America," Censky said.

With the GGDAs, ASA is trying to build consensus to negotiate the removal of tariffs in India.

Seeking market investments
Bob Metz, ASA chairman and South Dakota farmer, said the U.S. soybean group has already invested $10.0 million in getting the India market open, now it's time the South America countries contribute marketing efforts. After all, South America producers are positioned to benefit just as much as the U.S.

"We have asked the South America countries to work with us on a number of projects in India. We have more projects than funding. We will come back in the spring and get their commitments." Metz said. "If we don't get some sort of an investment commitment, the U.S. investment will go somewhere else."

One of the projects the ASA is asking help with is conducting side-by-side food and feed trials using India's current protein ingredients and North and South America's soybeans.

"This is one of the methods we can use to show the Indians the higher quality of our soybeans," Metz said.

In addition, India imports most of their soybean oil supply. ASA hopes the GGDAs can assist India in producing their own soybean oil. As a result, India would be placing fewer soybeans on the world market, another advantage for the U.S. and the South America exports.

Meanwhile, Cinsky sees each country involved in the GGDAs, offering different levels of financial contributions.

"Paraguay produces 5.0 million metric tons, compared to Brazil with 45.0 million metric tons. So, those commitments are going to have to be different.

During this International Growers' Forum to Paraguay and Argentina, ASA urged the Argentine Soybean Chain Association, (ACSOJA), to up its commitment regarding the India market.

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