The American Soybean Association (ASA) is calling for all Members of Congress to support Permanent Normal Trade Relations (PNTR) with China, which is a fast-growing billion-dollar market for U.S. soybean producers. A group of ASA members representing many soybean production states is in Washington this week to personally deliver the support message to their representatives.

"A ‘no’ vote from the U.S. Congress could cause irreparable harm to U.S. oilseed producers and processors by turning the most promising market for oilseeds and oilseed products in the 21st century over to our competitors in the European Union, Canada, South America, and Southeast Asia," said ASA Chairman Mike Yost, a Murdock, Minn. soybean producer.

Of the $13 billion worth of all U.S. product exports to China in 1999, nearly $900 million (more than 6 percent of total U.S. exports) was soybeans, soybean meal and soybean oil. According to industry estimates, demand for soybeans in China could double in the next five to ten years. China’s purchases from the U.S. this year are expected to exceed $1 billion in value. With total purchases of four million metric tons (147 million bushels) expected this year, China will be the largest export market for U.S. oilseeds and oilseed products.

The potential impact of increased Chinese imports of U.S. oilseeds and oilseed products on farm prices and producer income has been demonstrated in recent years. The value of U.S. soybean and product exports to China has increased from $233 million in 1995 to more than $1 billion in 1998. When economic problems in Asia, Russia, Eastern Europe, and Latin America stymied demand, while global output of all oilseeds surged, increased exports to China helped temper price declines.

"Even more impressive than current imports is China’s potential for increased imports of U.S. oilseeds, oilseed products, and livestock products," said Yost, who also serves as Chairman of the American Oilseed Coalition (AOC), a group that represents the ASA as well as the National Cottonseed Products Association, the National Oilseed Processors Association, the National Sunflower Association and the U.S. Canola Association.

China’s population of over 1.3 billion is becoming increasingly urban, and demand is rising for a diet higher in vegetable oil and protein. Per capita oil consumption in Hong Kong is 66 pounds compared to only 19.4 pounds in other parts of China. Doubling this level would increase world trade in vegetable oils by 11.4 million metric tons, or 35 percent, which is equivalent to 119 percent of total annual oil consumption in the U.S.

Similarly, China’s per capita consumption of soybean meal is only 17.8 pounds annually compared to 174 pounds in Taiwan. If consumption rose to one-half of Taiwan’s level, China would require soybean meal imports equivalent to 1.85 billion bushels of soybeans, about two-thirds of annual U.S. production.

China has agreed to bind its currently applied duties on soybeans and soybean meal at 3 percent and 5 percent, respectively. For soybean oil, the in-quota tariff will be reduced to 9 percent from 13 percent, and the Tariff Rate Quota (TRQ) increased from 1.7 million metric tons in 2001 to 3.2 million tons in 2005. During this period, the over-quota tariff on soybean oil will be reduced from 85 percent to 9 percent, effectively eliminating the TRQ by 2006. The present monopoly on imports of soybean oil controlled by state trading enterprises will also be eliminated by 2006. In addition, soybeans are assured that tariff levels will not exceed those of competitor oilseed crops.

Growers wanting to learn more about the importance of PNTR for China should visit the American Soybean Association’s web site at www.amsoy.org where a special "Vote China Trade Now" area is available.

ASA is encouraging all soybean producers to call their U.S. representative today to urge them to vote in favor of China PNTR. Members of Congress can be reached by calling the Capitol Hill switchboard at 1-202-225-3121.