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Expanding Trade Opportunities in South Korea and Japan

May 17, 2013

           

As part of the RFA's commitment to increasing ethanol export markets, I recently had the unique opportunity to join the U.S. Grains Council on a trade mission to South Korea and Japan. We visited Seoul and Tokyo, where we discussed U.S. ethanol policy, import and export capabilities, trends in corn co-products, production of co-products, transportation and uses. South Korea and Japan are sophisticated buyers of U.S. corn and co-products, so I was surprised to see how much of the livestock industry's misinformation about ethanol and its impact on feed prices had made it to the Pacific Rim. Thus it became crystal clear to me why it is so vitally important to lend our voice to the overseas discourse and continue to build a relationship with these countries in order to expand the export opportunities for fuel ethanol. We began at a conference in Seoul, South Korea that was attended by more than 100 feed millers, distributers, and animal nutrition practitioners. They raised concerns over the drought and its impact on high corn prices, tight corn supply and U.S. corn exports. Additionally, members of the audience asked about the size of the new crop being planted in the United States and the current delay in planting. We were able to address their concerns, and there was a consensus among U.S. participants at the conference that of the 97 million acres projected to be put into production only about two million would be lost due to late planting. After the conference, we met with a dozen commodity feed buyers and the Korea Feed Association. There were several technical questions about DDGS regarding its composition and nutritional aspects. I was able to give more insight on DDGS and assured them the Renewable Fuels Association will work with the U.S. Grains Council to help provide any additional technical assistance that is needed. After easing concerns over corn production and prices in South Korea, we moved on to Tokyo and made contact with the embassy's senior agriculture attaché discussing the continued importation of ethanol from the United States. We spoke about the United States' ability to produce enough ethanol to continue exporting to Japan, and were encouraged by their desire to look into alternatives to nuclear energy. Additionally, we met with the Japan Feed Manufacturers Association and assured them the United States has enough capacity to produce and supply corn for both feed/food and fuel uses, while also having ethanol available for export. Japan has a mandatory target of ethanol use program. Today, most of Japan's ethanol comes from Brazil, but high sugar prices and reduced production there have opened the door to other sources of supply. Japan is expected to import about 400 million gallons by 2017. Additionally, South Korea is just beginning to explore the use of ethanol for fuel. They have a sizable industrial ethanol import market of roughly 70 million gallons annually. We also addressed roughly 200 Japanese trade associations, government employees, and media outlets. The United States is Japan's largest corn supplier and DDGS has become an important part of feeding livestock in Japan. We promoted the use of DDGS and educated the attendees on its nutritional value. This was a substantive trip and gave me a unique opportunity to discuss and promote the trade of ethanol and its co-products overseas. U.S. agriculture has the ability to meet the food, feed, and fuel needs now and in the future and it is important that we continue to take that message abroad.