COEXISTENCE IN
MAIZE AND SOYBEAN
SUPPLY CHAINS IN
PORTUGAL
C. Trindade, J. Ponte, F. Quedas
19-06-2013
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7.
Portuguese Supply of Maize and Soybean
Interviewees
Structure of Supply Chains
The Market of Primary Processed Maize and Soybean
Supply Chain Deals and Pricing Mechanism
GM Products, GM-Free Products and Segregation
Conclusions
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Imports, domestic production and exports
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PT supply of grain maize and soybean (103 tons)
Grain maize
Soybean
Year
Production
Imports
Exports
Imports
2009
634
1414
31
1190
2010
626
1411
24
1186
2011
832
1602
33
1110
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Maize grain imports: yearly shares of quantity
(ton) and value (€) of major origins
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Exports of Portuguese maize and maize products
Product
Grain
Meal
103€
ton
By-products
103€
ton
103€
Starch
ton
103€
Others (%)
Year
ton
ton
€
2009
30,831
7493
4824
1636
3117
1047
1701
640
3%
17 %
2010
23,762
5811
5659
1741
3102
1037
248
120
4%
24 %
2011
33,072
9277
4058
1902
3594
1327
4920
2295
3%
15 %
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Share of soybean products in Portuguese imports
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Yearly shares of quantity (ton) and value (€) of
major origins of soybean grain
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Yearly shares of quantity (ton) and value (€) of
major origins of soybean meal
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2011 shares of quantity (ton) and value (€) of
major origins of soybean oil
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• Association of Maize and Sorghum Producers (ANPROMIS)
• Association of Storers, Traders and Importers of Cereals and Oilseeds
(ACICO)
• Association of Compound Feed Manufacturers (IACA)
• Importers: Acembex, Bunge Ibérica Portugal, S.A. and Louis Dreyfus
Commodities
• Port operator: Silopor
• Certifier: Société Générale de Surveillance S.A. (SGS)
• Agricultural trading post: AGROMAIS
• Wholesaler: Reagro
• Crusher: Nutrinveste SGPS, SA., Sovena Group
• Mill industries: Atlantic Meals and Carneiro & Campos
• Starch industry: Portuguese Company of Starch (Copam)
• Compound feed industries: Poultry Company of Center, S.A. (Cac)
and pig industry Raporal.
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Importers and certifiers
• Most importers are international marketing companies
(Bunge, L. Dreyfus, Noble, Cargill), usually with a very
simple local structure.
▫ National: Iberol, Acembex and the Cooperative of
Compound Feed Manufacturers’ Supply (Caiaca).
• Cost, Insurance and Freight (CIF) imports
• Certifiers: SGS and Inspectorate (Bureaux Veritas).
• Usually port operators act as service providers, under
loyalty agreements.
• Tagol and Bunge have a contract à façon, and have a
terminal port and elevators of their own.
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Port terminals and operators
• Port terminals of Lisbon, held by Silopor and by Oilseed
Company of Tejo, S.A. (Tagol): 80 to 90% of maize and
soybean imports.
• Port of Leixões, in Porto: 10 to 20%.
• Small ports (ships up to 5000 tons): Aveiro and Figueira da
Foz.
• Port operators are liable for:
▫ unloading, weighting, storage and delivery to buyers of the product
and quantity indicated by the IMC.
• Lisbon - Silopor and Tagol: unloading and storage
• Leixões Company of Traffic and Stowage (ETE):
unloading; Leixões Elevators (SdL): storage.
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Other players
• Wholesalers:
▫ Reagro (80%) and Acembex (15 to 18%)
• Crushers:
▫ Sovena (edible oils), Iberol and Torrejana (biodiesel)
• Primary processors (maize):
▫ A single starch firm: Copam
▫ Main mills: Atlantic Meals and Carneiro & Campos’
• Feed industry: 125 compound feed manufacturers
▫ Valouro, (15% share), Lusiaves (production of feed and
broilers), Saprogal Portugal and Provimi Ibéria: 45 to 50%
share
▫ Ten largest firms: 75% share
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Primary processing products are directed to food industry or
biodiesel, as feed industry uses 40 to 50% grains (maize and
soybean) and 50 to 60% of by-products of mills and crushers.
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Self-supply
Imports
Crushers
Soybean
meal
Maize
growers
Exports
Wholesalers
Feed
industry
Starch
Soybean oil
Food
industry
Biodiesel
Farmers’
associations
Mills
Brewing
Integrated
Free market
Baby food
Egg/Broiler
Pig
Beef/Milk
Others
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Supply Chain Deals
• Maize supply of food industry
▫ Trade agreements between maize mills and maize
producers’ organizations, both in Portugal and Spain.
▫ Deliveries usually made overland, and storage facilities of
producers’ associations or of the mills themselves.
• Supply of feed industry and soybean crushers
▫ Dealt with the wholesaler (Reagro) or the importers.
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Pricing Mechanism - 1
• The prices of maize and soybean are established after the
Marché à Terme International de France (MATIF),
MATIF corn and MATIF soya, the Chicago Stock
Exchange and the cost of transport.
• Freight rates:
▫ Maize: 20 $/ton (Ukraine) to 35 $/ton (Brazil)
▫ Soybean grain: 28 $/ton (USA) to 30 $/ton (Brazil and
Argentina)
▫ Soybean meal: 32 $ to 38 $/ton
• Premium price for non-GM maize
▫ Imported maize: 20 to 30 €/ton
▫ Domestic maize: 10 to 20 €/ton
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Pricing Mechanism - 2
• Price of maize by-products: 15% lower than dry grain
price.
• Some compound feed producers have their feed prices
indexed to the stock Exchange of Lleida.
• Net margin of compound feed producers’ sales to animal
producers: it rates 10% and 20% for, respectively,
integrated and non-integrated customers.
• Price fluctuations are also effected by energy cost and,
for feed, by competition between manufacturers.
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Labelling and thresholds
• In Portugal GM-labelled products include:
▫ All compound feed except organic compound feed
▫ Some soybean edible oil or soybean containing edible oil
brands.
▫ No other food product is GM-labelled.
• Negative labelling is rare
• Non-GM products:
▫ Some food industries do simply comply with the 0.9%
threshold, others are intended to be GM-free, and use
thresholds as low as 0.01%.
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IP of GM-free products
• Port operations are the most problematic for IP of GMfree products:
▫ Non-GM commodities may either be unloaded from cargoships to smaller ships that take them to a different port
terminal (Lisbon port, used by Reagro) or be unloaded by
non-continuous systems and stored in horizontal silos
(Aveiro port, used by Acembex).
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IP by IMC
• Neither Dreyfus nor Bunge import GM-free products,
though they might import from non-GM producing
countries, such as Ukraine.
• To prevent risks of non-authorized events IMC follow
one of two options: take advantage of their own IP
systems in the country of origin or change the country of
origin.
• IMC are responsible for testing, that is run by certifiers
that also oversee the loads, check the cleaning of the ship
and check cross-contamination at the port. IMC usually
manage certification at corporate level.
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• Portuguese maize and soybean supply chains are
decisively contingent on imports.
• Feed industry is by far the major customer of maize and
soybean and given its low net margins took the option of
GM-labelling its products.
• Edible oils are also currently GM-labelled when they
contain soybean oil.
• Therefore, the bulk of maize and soybean imports does
not require segregation of conventional and GM
materials, but only demands certification for the absence
of EU non-authorized events.
• However, millers and starch industry on one hand, and
meal and starch importers on the other hand, have to
deal with IP of non-GM products, coping with thresholds
that might vary between 0.9% and 0.01%.
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• Millers and starch industry mainly rely upon
conventional maize domestic or Spanish production,
contracting directly with farmers or their organizations,
or imports from other European countries, such as
Ukraine or France.
• In their own processing plants millers and starch
industry easily manage to succeed in IP, as they don’t
process GM maize at all.
• Given the price premiums for non-GM maize, individual
farmers and some farmers’ associations look consistently
bind to millers, in spite of the absence of integration
systems.
• On the other hand, maize large demand by feed industry
and its GM-labelling option are pushing other farmers to
adopt Bt-maize to minimize corn borer damages.
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• As the purpose of this research was a comprehensive
look over the supply chains, some minor players haven’t
been heard.
• In particular, the market niche of maize bread, that
involves numerous small millers, will be the focus of the
continuation of this research. Another further step will
be the comparison of maize and soybean supply chains
of different EU and third countries.
Thank you very much
Grazie mille
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GM-free testing
• Besides certifiers’ labs, such as SGS labs in
France, GM-free product importers and maize
mills also use customers’ reference labs:
• Atlantic Meals: Danone lab in Germany
• Acembex and Carneiro & Campos’ Mill: Nestlé
lab in Italy.