African feed market could receive additional US grain and soybean supplies

A new $500 mln trade finance mechanism could expand opportunities for African importers to purchase grain, soybeans and other feed ingredients from the US. The main effect is expected to come from improved access to financing for foreign trade transactions.

The mechanism includes a counter-guarantee for IFC under the Global Trade Finance Program. This is expected to allow banks in importing countries to finance more purchases of US goods while reducing transaction risks.

For Africa’s livestock and feed industries, the programme could create an additional supply channel for feed grains, soybeans and soybean products. USDA has previously identified these commodities as having strong export potential in West African markets.

However, the programme does not provide dedicated financing specifically for the feed industry or agricultural commodities. Actual shipment volumes will depend on which banks and countries join the mechanism, as well as on the competitiveness of US supplies compared with alternative exporters.

According to DFC, the programme could support up to $20 bln in US exports to countries in Africa, South America and Southeast Asia. Specific volumes of future feed grain, soybean and meal shipments to Africa have not yet been determined.

Tags: grain, soybean, USA, Africa, compound feed