Farmers seek higher soybean premiums

U.S. farmers are planting fewer acres of non-GMO soybeans that are more expensive to produce and lower-yielding than genetically modified varieties, Dan Duran, chief executive officer of the U.S. Soybean Export Council, said in an interview.

Increased premiums would raise costs for food suppliers in Japan, the largest export market for non-GMO soybeans, where companies including Shinozakiya Inc. use the oilseed in foods such as tofu. Modified crops are not used because of consumer safety concerns. Other Asian buyers, such as Taiwan and South Korea, also import non-GMO soybeans.

“There is no guarantee that there will be product available on the spot market,” Duran said in an interview in Tokyo on Nov. 16. “Without contracts, no one can guarantee availability.”

Soybeans have gained 59 percent this year as U.S. farmers planted the fewest acres in 12 years to sow more corn. Soybean futures for January delivery rose to US$10.88 a bushel, the highest since June 1988 on Nov. 16. The contract traded at US$10.86 a bushel at 2:58 p.m. Singapore time Monday on the Chicago Board of Trade.

Non-GMO soybeans for October delivery, the most active contract, on the Tokyo Grain Exchange, closed 1,000 yen, or 1.5 percent, higher at a record 66,000 yen (US$597) a metric ton Monday. The futures have gained 51 percent this year.

Genetically modified soybeans for October delivery ended 650 yen, or 1.1 percent, higher at 58,390 yen on the Tokyo exchange Monday. Most active futures have advanced 49 percent this year.

U.S. farmers are charging premiums of US$1.50 a bushel on average for non-GMO soybeans next year, up 25 percent from this year, said Nobuyuki Chino, president of Tokyo-based trading company Unipac Grain Ltd. The premiums are the price difference over modified beans.

“Premiums are rising as the number of non-GMO soybean growers is declining,” Chino said by phone.

U.S. farmers planted 63.7 million acres to soybeans this year, down 16 percent from a year earlier, according to the U.S. Department of Agriculture.

U.S. farmers may increase total soybean plantings next year by 4 million to 8 million acres, while the percentage of acres sown to modified varieties may rise by 1 or 2 percentage points from 91 percent this year, Duran said.

“Higher premiums and forward contracting might bring more acres of food-grade soybeans back into production,” he said. Premiums for non-GMO soybeans differ depending on varieties and agreements between farmers and buyers.

Japanese demand for food-use soybeans is expected to rise 0.8 percent to 1.05 million metric tons this year from last year, according to the Ministry of Agriculture, Forestry and Fisheries.

“It is becoming difficult to secure a sufficient amount of non-GMO soybeans,” Yutaka Murakami, chairman of the Japan Tofu Association, said at a news conference in Tokyo Nov. 14.

Japan imported a total of 4.04 million tons of soybeans last year for food, soybean oil and soybean meal, of which 3.23 million tons or 80 percent were from the U.S. Brazil was the second-largest soybean supplier to Japan, according to the Agriculture Ministry. Non-GMO beans are not required for crushing.

Japan imported about 500,000 tons of non-GMO food soybeans from the U.S. last year, Duran said. Other imports of non-GMO beans were mostly from Canada and China.

Subscribe to The China Post and save 25%. Click here

SharePrintEmail

Write a Comment

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos Respond to this email