Soybeans: Nebraska Companies Sign Agreement with Indonesia – DTN

Soybean harvest. ©Debra L Ferguson

Nebraska companies signed a memorandum of understanding with Indonesia’s trade minister on Friday to sell more Nebraska-sourced soybeans to the country. 

Nebraska leaders held a series of events with a trade delegation from Indonesia led by that country’s Minister of Trade Enggartiasto Lukita and Ambassador to the U.S., Budi Bowoleksono.

A morning event at the Omaha Chamber of Commerce was filled with jokes about the differences in Nebraska’s weather from Jakarta’s — as a snowstorm was expected to hit Omaha — and professed love for Nebraska beef as the “finest in the world.”

The events reflect how various states continue working to make their own trade connections with foreign countries, much like Minnesota and Iowa officials signed a memorandum of understanding to sell as much as $1.56 billion in soybeans to Taiwan.

Lukita said Indonesia signed an agreement with U.S. officials last summer to increase imports of U.S. soybeans by $641 million. Indonesia imports more than 98% of its soybeans, most of which come from the U.S. He also mentioned a desire to buy more U.S. wheat.

“We prefer to import products from the U.S. because of the quality,” Lukita said. “And we are trying to import more (soybeans) and also meat.”

Lukita added that Indonesians use soybeans for food products, mainly for tofu and tempeh, which are major sources of protein for some Indonesians.

Nebraska exported about $82 million in products to Indonesia in 2016, about half of which were agricultural products, Gov. Pete Ricketts said.

Rep. Don Bacon, R-Neb., who struck up a relationship with Indonesian officials through his office, also noted Nebraska exports to Indonesia had grown 244% over the past three years. “And we’re looking to do that again,” Bacon said.

Bacon added that Indonesia has a trade surplus with the U.S. and is looking to reduce that surplus by buying more agricultural products. That led both to last summer’s commitment and to Friday’s memorandum with Nebraska exporters.

Responding to a question, Ricketts told the Indonesian delegation the trade dispute between the U.S. and China opens up the market for other countries to step in right now and buy U.S. commodities such as soybeans. 

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“Obviously, there’s a lot of uncertainty around that,” Ricketts said of Chinese trade. “I think what it does is create a lot of opportunities for countries like Indonesia around products we export a lot to China, like soybeans. If that is a product you are looking for, there’s a great opportunity then to get to Nebraska producers for soybeans and be able to buy more of them. You may be aware the price of soybeans is relatively low compared to historic trends, so it’s a great opportunity to buy.”

Ricketts also added he likes working with the Trump administration on trade issues because people such as U.S. Trade Representative Robert Lighthizer “are very accessible,” Ricketts said. “So the administration is very responsive with regards to listening what is going on in states and being very accessible. It’s really a pleasure working with this administration on trade.”

Indonesia’s trade delegation also is interested in buying more Nebraska beef, but any beef sales to Indonesia must also be halal certified, meaning religiously permissible for Muslim consumption. Jalot Al-Absy, director for Halal Transactions of Omaha, explained some dynamics of the growing halal export market.

“With a large Muslim population, as Indonesia and its middle class continue to grow, the need for high-quality red-meat protein sources will continue to rise,” Al-Absy said, adding Indonesia already imports one of the highest percentages of halal products, including a spike in halal beef imports for Muslim holidays.

Nationally, Indonesia imported $38.5 million in U.S. beef through the first 10 months of 2018, up 15% over the same period a year earlier, according to numbers from the U.S. Meat Export Federation. 

Al-Absy also noted that, by mid-century, there will be 3 billion Muslim consumers globally, all of whom will require halal-approved products. Halal Transactions of Omaha certifies packing plants and food processors, and notes most Nebraska meatpacking plants already are halal certified for exports.

“Almost all of them now are halal certified because they really can’t afford to ignore the market,” Al-Absy said.

Still, leaders at Halal Transactions of Omaha also asked the Indonesian delegation if the government there could find a way to speed up its own approval, or listing process for packing plants.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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