Source: This Day
As the Regional Director of Sub-Saharan Africa for the U.S. Soybean Export Council, Kevin Roepke is chiefly responsible for the strategy and implementation of market and trade development for the organisation within the region. In this interview with Oluchi Chibuzor he speaks about the work of the council as well as efforts to strengthen relationship with Nigeria. Excerpts:
What effect will the AfCTA agreement have on the U.S. Soybean Export Council’s operations within Sub-Saharan Africa?
First, for our industries to be successful and stable, free and reciprocal trade is needed. Second, Nigeria is already one of the largest wheat importers and a rapidly growing poultry importer. The U.S. Soy industry can leverage these commercial relationships to model a robust soy supply chain.
Conversely, Nigeria is plagued with low purchasing power, low life expectancy (55 years) and a critical lack of infrastructure.
USSEC’s strategy is to create long-term relationships in the region that will enable the U.S. and partners to seize opportunities and be successful. One of the ways we plan on doing so is by establishing a SoyExcellence Centre in Nigeria. This will be the technical and policy pillar to advance the region’s soy supply chain. Currently, there is a Soy Excellence Centre in Egypt. There are significant opportunities to drive growth in Nigeria. At the end of the day, our strategy at USSEC is to create long-term and lasting relationships so that we all can benefit. And as we move ahead into 2021 and beyond, our goal in the U.S. is to continue to make our partnership even stronger and remain a consistent supplier to your industry and your customers.
How does USSEC intend to strengthen its trade relationship with African countries amidst the Covid19 pandemic; also, considering the forecast of a second COVID-19 wave, would there be expectations of increase in demand of soybeans or a reduction?
As we continue to navigate these unprecedented times, it’s more important than ever that we demonstrate to current and potential international customers the strength of our farmers and benefits of buying U.S. Soy. Homeland Security deemed agriculture as ‘critical infrastructure’ amid the COVID-19pandemic, and our farmers take their jobs to globally provide food, feed, fuel and fibre, very seriously. Agriculture and farmers have weathered some of the world’s most difficult seasons and obstacles but survived and overcame. The last few years have been some of the most challenging on record, but farmers maintain their commitment to doing everything they can to provide soy for food, fibre, fuel and other products. The same applies for COVID-19, but we’re resilient and moving forward.
Soybean farmers intend to serve as an example to others. By continuing their work safely, sustainably and effectively, soybean farmers will be an example to others of how to stick to doing what they do best, even in the most trying times. Looking ahead, we are optimistic for what’s on the horizon. While our soybean farmers are doing their job of providing a sustainable and high-quality product, U.S. Soy is working tirelessly to provide stability by building demand and expanding global market access for U.S. soybean products. Amidst the pandemic, USSEC will continue to connect global customers near and far. Having virtual meetings like the African Trade Exchange is a part of our plans to connect and highlight how the U.S. is a consistent trade partner with cutting-edge sustainability initiatives, and defined quality advantages.
With virtual formats, we can continue to provide our African partners to quality content, interactive sessions and valuable experiences. While in-person meetings and face-to-face conversations will always serve an important purpose, our increased use of technology and virtual events have allowed us to build and grow relationships.
How can technology and innovation drive the soybean value chain in Nigeria and how is USSEC supporting the soy value chain in Nigeria?
At the U.S. Soybean Export Council, our global team is laser-focused both on existing relationships abroad and investing in new ones to evolve emerging markets, identifying factors like growing populations, improving economic conditions and addressing protein deficiency among populations. In addition, this farmer-led organisation works every day to ensure continued market access for U.S. soy in various markets around the world. Sub-Saharan Africa and Nigeria are part of USSEC’s long-term strategy to build a strong pipeline of demand for U.S. Soy. The population of this region exceeds one billion people, with predictions to double by 2050, making it one of the most substantial frontier markets in the entire world. At USSEC, we believe this region holds tremendous potential. It is a great example of where we see a future for U.S. Soy. For Example, because of its growing population and low consumption of soy, Nigeria has been identified as a market that represents a growth opportunity for U.S. soy. Encouraging soybean and soybean related product consumption. Our partnership can turn the country into one of U.S. soy’s top three growth markets by2030. Right now, Nigeria’s population is projected to reach 264 million people by the year 2030. In 2016, Nigerian consumption of soy and soy-related products was one kg/person per year compared to an average of 55 kg/person per year in similar markets. Nigerian agriculture is also primarily rain-fed and characterised by low productivity, low technology and high labour intensity. However, the poultry and aquaculture sectors in Nigeria are projected to grow on average by 50 percent per year between 2015 –2020, while soybean production growth will average less than three percent per annum. In short, this means the country’s soybean supply shortfall will continue to widen. Nigeria will increasingly continue to depend on imports to satisfy this growing demand. While accurate data is still difficult to get, Nigeria produces around 600,000 metric tons (MT) of soybeans each year, and another 400,000 MT or so come across the border from neighbouring Benin. Depending on credit availability and many other factors, USSEC estimates that Nigeria could become a 2to 4 million metric ton (MMT) market for U.S. Soy in the medium to long-term. At this time, the country crushes about 1 MMT/year. We also estimate an almost immediate need for 50 to 100,000 MT to fill the current demand gap. In MY 2018/19, U.S. soybean meal sales to Nigeria’s poultry sector were between 31,000 and 50,000 MT. One such shipment of whole soybeans, initiated in August 2018, was valued at$15.461 million. Raw material insecurity is also causing poultry producers and crush facilities to approach additional growth to address future demand with caution. These numbers show how the need for a high-quality protein product in Nigeria, like U.S. Soy, will be vital as this region’s population continues to grow. Our soybean farmers are prepared to meet this need and demonstrate to Nigeria how U.S. Soy delivers proven, consistent quality, reliability and value to earn its role as a trusted partner around the globe. There are significant opportunities for U.S. Soy and Nigeria to collaborate and drive growth. One example is Soy Excellence Centres. With Soy Excellence Centres, we will be able to leverage relationships, conduct training and connect buyers and sellers.
Soy Excellence Centres (SECs) will play an important part in U.S. Soy’s efforts to expand markets: One of the ways we are working to build demand for U.S. Soy is through SECs. The U.S. Soy industry is working to establish these centres throughout Sub-Saharan Africa starting with one in Egypt and a future site planned for Nigeria. The goal of SECs is to have them become a one-stop shop for industry training. These centres are designed to provide training, resources and education to all members of the soy value chain. They will target farmers, animal protein integrators, feed millers, animal nutritionists and local academic resources. This includes demonstration equipment used to show the production of soy. We will be able to expose participants to all the available options in the production of high-quality soymeal and soy.
These Centres will build help awareness of the benefits of soy in animal feed, aquaculture and human consumption through teaching and highlighting best practices: There will be an emphasis on providing opportunities for stakeholders to directly experience these practices in a real-world setting that is relevant to the local market and at a commercial scale. SECs will also build and facilitate business relationships and links between local and international businesses. These Centres will not only educate and train but they will also build and facilitate relationships while also supporting the soybean value chain in Nigeria.
How is USSEC giving back to societies in which it operates?
Our work to build preference for U.S. soy is more important than ever. Soy production is growing worldwide, and we continue to work across borders, industries and disciplines to find and develop markets for U.S. soy products. The U.S. Soy industry is proud to offer reliable supply, cost-effective commodities, complete nutrition and sustainably produced soy.
Sub-Saharan Africa is currently the sixth largest destination of U.S. feed and grain exports, with Nigeria Being the largest destination within the region. According to the USDA, soybean and soybean meal feed use in the region are projected to increase by 59 per cent and 35 per cent, respectively, until 2029. These numbers represent an opportunity for boosted demand in the U.S. Soy. The need for a high-quality protein product like U.S. soybean meal will grow even more vital as this region’s population continues to grow. Our farmers are prepared to meet this need and show how U.S. Soy delivers proven, consistent quality, reliability and value to earn its role as a trusted partner around the globe. Earlier this year, a new comprehensive study reinforced U.S. Soy’s reputation as a global leader in nutrient density and economic value. A meta-analysis of eighteen different studies with 1,944 samples quantified the relationship between country of origin of the bean and the chemical composition and nutritive value of the soybean meal. The analysis proves that U.S. soybean meal not only has an advantage relative to higher sucrose levels, superior amino acid profile, higher digestibility, increased metabolisable energy and lower fibre content (when compared to other origins) but it also has a price advantage. All of which can be beneficial to the Sub-Saharan Africa region.
What sort of policies and regulations would be essential for African governments to implement in order to drive rapid development of their agricultural value chains?
Lack of credit and under-utilisation of GSM credit guarantees have been long-standing constraints on sales of U.S. soy products to Africa. As part of its initiative to develop the multimillion-ton market for U.S.Soy in Africa, USSEC brought together key stakeholders this past September to address the credit issues head-on. On September 30, Nigerian banks, leading Nigerian supply chain executives, and Foreign Agricultural Service (FAS) administrators came together with U.S. soy industry representatives from USSEC and the American Soybean Association’s (ASA) World Initiative for Soy in Human Health (WISHH) during a virtual roundtable to discuss barriers to the use of U.S. Department of Agriculture (USDA) credit guarantee programmes in Nigeria and other emerging African markets. USDA export credit guarantee programmes can help make commercial financing available for imports of U.S. Soy and other food and agricultural products on deferred payment terms.