U.S. Dry Bean Outlook Enhanced by Strong Export Sales
September 18, 2006
The outlook for U.S. dry beans has been enhanced by strong export sales, especially to Mexico and Sub-Sahara Africa. Pent-up demand for U.S. beans is strong in a number of countries.
In fact, the larger bean harvest during 2005 and outlook for another good crop in 2006 might help to get the volume for U.S. dry bean exports back to over 300,000 tons in calendar 2006. Shipments declined from a peak of 319,524 tons in 2001 to a low of 241,787 tons in 2005. U.S. dry bean exports to Sub-Sahara Africa declined by more than half to 24,690 tons in 2005, compared with a peak of 54,998 tons in 2004. Ethiopia accounted for nearly a third of the U.S. bean exports to this region in 2004, compared with no business in that country during 2005.
Prospects for U.S. dry bean exports in 2006 are excellent. Dramatic gains for exports to Mexico and Caribbean markets contributed to a 70% increase for U.S. exports of dry beans in January-June 2006 to 161,074 tons, valued at $95 million. If shipments remained near this pace in the remaining months of 2006, total bean exports would surpass the peak of 319,524 tons recorded in 2001.
Attractive prices (for importers, that is, due in large part to larger U.S. dry bean supplies from last years increased production) combined with strong import demand in some countries have contributed to the impressive gains for U.S. dry bean exports this year.
The average price for U.S. dry bean exports declined from a peak of $675.26 per ton in January-June 2005 to $590.26 in the first half of 2006, with even greater reductions for the price for pinto beans. Demand tends to exceed imports in a number of countries in Africa and Latin America.
Following is a break down of the supply/demand situation and outlook in key global markets, which ultimately impact U.S. dry bean prices.
Mexicos Bean Purchases Increased Sharply in 2005 and Early 2006 -- Following concern that bean yields in Mexico declined in 2004 and 2005, combined with the 2004 hesitation to make larger imports, trade policy shifted to arrangements to secure needed imports by late 2005. As a result, U.S. exports of dry beans to Mexico rebounded from a low of 38,661 tons in 2004 to 63,251 tons in 2005, and then nearly tripled in January-June 2006, reaching 54,378 tons, valued at $31.2 million.
U.S. exports of pinto beans to Mexico tripled in 2005, reaching $15.1 million, and then made a nearly fivefold jump in the first half of 2006. The much larger U.S. crop of beans in 2005 and problems for exports to some countries in Africa contributed to a greater focus by U.S. traders on Mexico.
Declining stocks in Mexico and attractive U.S. prices contributed to the rebound in trade for some types of beans. The average price for U.S. exports of pinto beans declined about a fourth in the first half of 2006.
U.S. Bean Exports To Canada Up 89% During First Half of 2006 -- Canada was a customer for 9,692 tons of U.S. dry beans during January-June 2006, compared with 4,930 tons in the first half of 2005, and the strong rise to 19,645 tons in calendar 2005. Duty-free trade allows Canadian importers to buy a wide range of classes of beans in the United States, plus quality seed.
Iraq Remains an Elusive Market -- Iraq needs to import about 40,000 to 50,000 tons of Great Northern beans. So far, efforts to export more U.S. beans in 2005 and early 2006 have faced barriers. It appears that some of the new people handling trade matters in Baghdad lack the ability to deal with imports as they should. Arrangements to export 10,000 tons of Great Northern beans to Iraq by U.S. exporters had not resulted in shipments through May 2006. The food aid exports of 24,831 tons of U.S. dry beans to Iraq in 2003 helped to offset the lack of expected shipments to Mexico. For early 2006, the situation is different with dramatic gains for sales to Mexico helping to offset a lack of exports to Iraq.
Rebound For Exports to Sub-Sahara Africa Underway -- U.S. exports of dry beans to Sub-Sahara Africa increased 92.4% in January-June, reaching 21,826 tons. This followed the reduction by more than half for shipments to the region in 2005, following peak exports of 54,998 tons in 2004. The 2004 deliveries included the shipment of 14,790 tons through the port of Djibouti for food aid distribution in Ethiopia, compared with the export of only 38 tons directly to Ethiopia in 2005. U.S. dry bean exports to Zimbabwe dived from a peak of 11,987 tons in 2004 to only 1,687 tons in 2005, before rebounding to 4,075 tons in the first half of 2006.
Zimbabwe has larger food aid needs for beans and some other food items than has been arranged. Unfortunately, problems with infrastructure disruptions and red tape tend to hamper food aid shipments of beans to Zimbabwe.
Malawi provides a sharp contrast to Zimbabwe, with better treatment of food aid workers in Malawi reported. U.S. exports of dry beans to Malawi reached a record 3,790 tons in January-June 2006, compared with 1,964 tons in the comparable months of 2005. Malawi was a leading destination for exports of dark red kidney beans recently.
Angola was a customer for 8,738 tons of U.S. dry beans in the half of 2006 quadruple the level for the comparable months of 2005. Angola had been a market for 10,193 tons of U.S. dry beans in 2002. If fewer beans come from Europe and China in late 2006, Angolas traders may shift to much larger purchases of U.S. beans.
Mozambique was a market for 1,996 tons of U.S. dry beans in the first half of 2006 a quantity identical to shipments for calendar 2005. More food aid beans are needed for distribution in Mozambique in urban centers. Mozambique had been a market for beans exports from Zimbabwe in the 1990s, but now Zimbabwe has become a large importer through food aid. This means more of Mozambiques bean imports will come from China and the United States.
Further Gains Awaited For Sales to Congo -- Kinshasa is a thriving capital city in Democratic Republic of Congo with about 4 million people and substantial cash inflows for some people from exports of petroleum and minerals. U.S. exports of dry beans to this market exceeded 1,440 tons in both 2004 and 2005, although no shipments were reported in the first half of 2006. Reduced bean production in Europe during 2006 because of dry weather may contribute to greater purchases of U.S. beans in 2006 by traders in Kinshasa.
Exports to Caribbean Markets Doubled In Early 2006 -- Countries in the Caribbean were customers for 25,390 tons of U.S. dry beans in the first half of 2006 a gain of 80% over the comparable months of 2005. Exports to Dominican Republic were up 179% to 9,153 tons. Shipments to Haiti rose 158% to 11,972 tons. Cuba was a market for 1,354 tons in the first half of 2006, compared with no shipments in the first half of 2005, and 1,016 tons for all calendar 2005. Jamaica was a market for 1,587 tons, compared with only 292 tons in the first half of 2005.
Japan Buying More U.S. Beans -- The old quota system for arranging dry bean imports into Japan has been abolished. China accounted for over two-thirds of Japans dry bean imports in recent years. U.S. exports of dry beans to Japan increased 74% in the first half of 2006 to 8,259 tons, with larger deliveries of lima beans.
European Union Import Demand May Rise -- Dry summer weather in much of the European Union may cause a reduction for crop yields during 2006, including some of the mechanized farms growing edible beans in France, Germany, and Poland. U.S. exports of dry beans to the 25 countries of the European Union increased 5.9% in the first half of 2006 to 28,780 tons, including the delivery of 15,026 tons to the UK.
Larger Great Northern sales caused exports to France to more than double, reaching 3,947 tons. Spain was a customer for 1,545 tons in the first half of 2006, or 30% below the level for January-June 2005. Exports to Belgium rose by 28.4% to 1,475 tons in the first half of 2006. Larger purchases by transit traders in Antwerp may come forth in late 2006.
Shipments of U.S. dry beans to Italy were up 44.6% to 601 tons in the first half of 2006. Italys total imports of edible beans are in the range of 200,000 tons annually with substantial arrivals from other European countries and China. U.S. dry bean exports to Germany increased 48.7% to 1,037 tons. More edible beans were cultivated in recent years within 100 miles of Berlin, but very hot weather in the summer of 2006 may have reduced yields. Shipments to Greece declined 28.7% in the first half of 2006 to 902 tons.
Smaller Exports To Australia -- U.S. dry bean exports to Australia declined nearly a third to 2,151 tons in the first half of 2006, following strong growth to 4,298 tons in calendar 2005. Australia is an important market for navy pea beans. The average price for U.S. bean exports to Australia rose to $718.74 per ton in the first half of 2006.
Sharp Hike for Exports to Turkey -- Turkey is often an important transit trade location for beans destined for Iraqi importers. U.S. exports of dry beans to Turkey more than tripled in the first half of 2006, reaching 1,666 tons for an average price of $710.68 per ton. Traders in Turkey import mostly Great Northern beans from the United States, although official trade data for Turkey may not show the cargo as moving through customs. This indicates that transit traders arranging shipment to Iraq or some other country may have occurred.
Parker is an international dry bean market analyst from Oakton, Va., and a former USDA analyst. He may be contacted by email at firstname.lastname@example.org.