1. Southeast Asia’s Emergence as a Top U.S. Market USDA Agricultural Outlook Forum 2011 February 24, 2011 John C. Baize President John C. Baize and Associates

2. Southeast Asia

3. Population of Southeast Asian Nations Estimate for 2010 and Projection for 2020 CountryPopulation 2010Population 2020 Indonesia242.97267.53 Malaysia28.2832.65 Philippines99.90119.33 Singapore4.705.02 Thailand66.3469.56 Vietnam89.5798.72 Cambodia14.4516.93 Laos6.377.45 Myanmar (Burma)53.4159.13 Total605.99676.32 Source: U.S. Census Bureau

4. Per Capita GDP (Purchasing Power Parity) of Southeast Asian Nations in 2010 CountryPer Capita GDP Indonesia$4,380 Malaysia$14,603 Philippines$3,725 Singapore$57,238 Thailand$8,643 Vietnam$3,123 Cambodia$2,086 Laos$2,435 Myanmar (Burma)$1,246 Source: International Monetary Fund

5. Southeast Asia Had Solid Economic Growth in 2010 After Slower or Negative Growth in 2009 Country20092010 Indonesia4.556.00 Malaysia-1.707.20 Philippines1.066.70 Singapore-1.2814.60 Thailand-2.257.60 Vietnam5.326.80 Sources: International Monetary Fund and Central Intelligence Agency

6. U.S. Has Ocean Shipping Advantage From PNW, But Not from Gulf (Nautical Miles) PortNew OrleansPortlandSantos, BrazilBuenos Aires Jakarta, Indonesia11,7827,4148,5908,856 Bangkok, Thailand12,1567,8229,80510,071 Port Klang, Malaysia11,2997,3578,7679,073 Manila, Philippines10,7816,02210,09110,357 Ho Chi Minh, Vietnam11,4526,8889,5939,859

7. Overview of Southeast Asian Nations Economies vary from highly capitalistic (Singapore) to communist (Vietnam). Infrastructure varies from very developed (Singapore and Malaysia) to very poor (Vietnam, Indonesia, and Philippines). Corruption remains a problem except in Singapore. Large share of the population in all countries except Singapore and Malaysia live mainly in rural areas and heavily tied to agriculture. Demand for pork is limited by Muslim populations in Indonesia (86%), (Malaysia (60%), Singapore (15%), Thailand (5%) and Philippines (5 %). Religious/ethnic violence not a significant problem except in parts of Indonesia and Thailand and on the Philippine island of Mindanao. All nations in the region have good relations with the U.S. Biotechnology is not a sensitive issue in the region.

8. Overview of Southeast Asian Nations Agricultural trading and processing companies largely family controlled with most by families of Chinese descent. Large agricultural firms located in the region include Charoen Pokphand (CP), Wilmar, Gold Coin, KFC and San Miguel. Senior management of most larger agricultural companies are fluent in English with many being educated in the U.S., Australia, or Britain. Companies are extremely open to new ideas and quick adopters of new technology and management systems. There is a strong affinity for trading with the U.S. Financial and trading center is Singapore where all major multinational firms have trading offices. U.S. agricultural cooperators with offices in the region include U.S. Soybean Export Council, U.S. Grains Council, U.S. Wheat Associates, U.S. Meat Export Federation and USA Poultry & Egg Export Council

9. Southeast Asian Agricultural Sector Both a Large Exporter and Importer Southeast Asia has a large agricultural sector. It is a very large exporter of palm oil, rubber coconut oil, tropical fruits, coffee, shrimp and rice. The region exports about 92% of the world’s palm oil and 95% of the world’s coconut oil. Thailand is a large net exporter of poultry meat. Southeast Asia is a large net importer of soybeans, soymeal, corn, wheat, DDG and cotton. Southeast Asia also is a growing importer of beef, pork, broiler meat, wine, and processed food.

10. Value of U.S. Agricultural Exports to Southeast Asia CYs 2000 - 2010 Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics

11. Value of U.S. Agricultural Exports to Southeast Asian Nations CYs 2007 – 2010 $ Billion 2007200820092010 Indonesia$1.542$2.195$1.796$2.246 Malaysia$0.563$0.595$0.695$0.713 Philippines$1.112$1.734$1.294$1.634 Singapore$0.374$0.485$0.445$0.498 Thailand$0.885$1.063$1.046$1.152 Vietnam$0.494$0.906$0.922$1.317

12. U.S. Exports to Vietnam Have Grown Faster Than Any Other Market With Imports in Excess of $400 Million

13. Southeast Asian Imports of Selected Commodities 2006/07 – 2009/10 and USDA Forecast for 2010/11 MMT Commodity2006/072007/082008/092009/102010/11 Corn4.3674.3625.2396.2536.030 Soybeans3.5453.5983.6714.2054.565 Soymeal9.0788.8179.2709.83310.317 Soyoil0.2420.2750.2420.3220.336 Wheat12.37711.48312.23313.89012.925 Cotton (Mil. Bales)5.385.735.176.075.55

14. Sotheast Asia’s Imports of Soybeans and Soymeal 2000/01 – 2009/10 and USDA Forecast fro 2010/11

15. Soybean Imports by Southeast Asian Nations 2006/07 – 2009/10 and USDA Forecast for 2010/11 MT 000 Country2006/072007/082008/092009/102010/11 Indonesia1,3091,1471,3931,6201,635 Malaysia444517530580610 Philippines167413510570 Singapore19201920 Thailand1,5321,7531,5101,6601,830 Vietnam74120184220400 Total3,5453,5983,6714,2054,565

16. U.S. Soybean Exports to Southeast Asia 2003/04 – 2009/10 MT Soybeans2003/042004/052005/062006/072007/082008/092009/10 Indonesia1,004,090993,7071,214,7811,372,9821,149,3291,473,7841,673,220 Malaysia224,286172,964206,417366,831199,090236,451364,821 Philippines179,276196,301110,88797,66952,65549,65180,171 Singapore49114649820,8065,0021,0307,968 Thailand379,015551,222295,796547,841163,266209,528475,934 Vietnam1181,4932,38816,16472,475156,437136,474 Total1,787,2761,915,8331,830,7672,422,2931,641,8172,126,8812,738,588

17. Soymeal Imports by Southeast Asian Nations 2006/07 – 2009/10 and USDA Forecast for 2010/11 MT 000 Country2006/072007/082008/092009/102010/11 Indonesia2,2372,4292,3392,3302,600 Malaysia8999229341,1001,120 Philippines1,3571,2131,2951,1001,225 Singapore19222122 Thailand2,2751,9352,1602,5132,550 Vietnam2,2912,2962,5212,7682,800 Total9,0788,8179,2709,83310,317

18. U.S. Soymeal Exports to Southeast Asia 2003/04 – 2009/10 MT Soybeans2003/042004/052005/062006/072007/082008/092009/10 Indonesia 105,904175,70444,71689,104147,875141,820528,992 Malaysia 33610,0065,86019,78175,56922,002123,786 Philippines 254,129446,293405,469273,908559,857493,350957,488 Singapore 673671,3573,620824568 Thailand 2,35087,2851,86714,07224,408116,613204,067 Vietnam 29,96723,02423,19537,210144,906126,004474,474 Total 392,753742,678482,465437,695952,623899,8132,289,375

19. Soyoil Imports by Southeast Asian Nations 2006/07 – 2009/10 and USDA Forecast for 2010/11 MT 000 Country2006/072007/082008/092009/102010/11 Indonesia18211318 Malaysia112123102128135 Philippines123265 Singapore35 383538 Thailand11000 Vietnam649287135140 Total242275242322336

20. Corn Imports by Southeast Asian Nations 2006/07 – 2009/10 and USDA Forecast for 2010/11 MT 000 Country2006/072007/082008/092009/102010/11 Indonesia1,0692943171,3001,100 Malaysia2,3633,1812,4472,800 Philippines16358432118100 Singapore22744325 Thailand100250900500700 Vietnam6505001,1001,5001,300 Total4,3674,3575,2396,2436,025

21. U.S. DDG Exports to Southeast Asia 2003/04 – 2009/10 MT Soybeans2004/052005/062006/072007/082008/092009/10 Indonesia36,32346,45864,560104,039184,008247,837 Malaysia30,78227,65736,98558,04940,80932,171 Philippines6,41953,50168,233103,788120,39089,437 Singapore02012500101539 Thailand7,43827,95454,316151,797274,884274,925 Vietnam15,12614,48849,241111,492206,171392,073 Total96,088170,259273,585529,165826,3631,036,982

22. Wheat Imports by Southeast Asian Nations 2006/07 – 2009/10 and USDA Forecast for 2010/11 MT 000 Country2006/072007/082008/092009/102010/11 Indonesia5,6015,2275,4195,3645,300 Malaysia1,1941,3311,1871,3031,300 Philippines2,7542,2663,2013,1852,800 Singapore318359280334350 Thailand1,1891,0721,1281,6001,300 Vietnam1,2281,1449251,9251,700 Total12,28411,39912,14013,71112,750

23. Southeast Asian Production of Broiler Meat and Pork USDA Estimates for CYs 2000 - 2010

24. Containerized Shipments to Southeast Asia Are Increasingly Important Containerized shipments of agricultural commodities to Southeast Asia has greatly increased opportunities for the U.S. Containerized shipments have expanded the number of exporters to the region and greatly increased the number of buyers who can now directly access U.S. commodities. With containers smaller users in the region can now buy higher quality products in smaller quantities from smaller U.S. suppliers. Containerized shipments have greatly lengthened the period when U.S. commodities are competitive in the region. The U.S. has advantage over other suppliers because of large surplus of empty containers in the U.S. Containerized shipments mostly have added to total sales rather than reducing bulk shipments by expanding number of buyers. CountrySoybeansSoymeal Other Soy ProductsTotal Indonesia434,182101,7191,344537,245 Malaysia140,44625,4321,112166,990 Philippines23,180146,7171,596171,493 Singapore19,0014,61460724,222 Thailand99,97725,4713,839129,287 Vietnam71,11898,844160170,122 Total787,904402,7978,6581,199,359 Soy Shipments to Southeast Asia in Containers 2009/10 Marketing Year (MT)

25. Keys to Exporting to Southeast Asia Recognize each country is distinctly different. Personal relationships are essential. Buyers want to get to know their suppliers personally and develop trust in them. Exporter need to travel to the region. Supplying quality products on a consistent basis is essential. Do not underestimate the sophistication of the buyers and their companies. Most companies are very sophisticated. Exporters should retain knowledgeable and respected representatives in the region. Exporters should work closely with cooperator organizations which have staff who understand the markets and know the importers and users.

26. Questions? John C. Baize Tel: 703-698-5908 Email: jbaize@attglobal.net