What Will be The Next Demand Drivers for Grain?
Political and socio-economic shifts have led to rapid changes in global grain markets. After two years of tariffs and trade wars, the old saying of “one in three rows of U.S. soybeans goes to China” doesn’t hold true any longer. So moving forward, what will be the new drivers of grain demand? Building new markets for U.S. grain outside of China will be key. New trade agreements with Canada, Mexico, Japan, and South Korea are promising but more will be needed. The fix however, will be found not in one large market, but a collection of markets.
U.S. groups are now targeting markets such as India, with 1.4 billion people - a population that is one-third vegetarian, and often protein-deficient. Another target is Pakistan, which imported hardly any U.S. soybeans five years ago, but is now a top-ten importer. The same goes for Southeast Asia, a region of 700 million people, and where over the past 10 years Vietnam went from not importing U.S. soybeans to being the U.S’s ninth largest customer. Myanmar is also a market that today holds the same potential that Vietnam held 15 years ago.
For long-term growth, eyes are turning to Africa where Nigeria is the seventh largest country in the world with 200 million people, and 45 percent of Tanzania’s population is under the age of 15.