India emerges as land of opportunity for U.S. producers
A recent trip to India helps provide insight on areas of strength and improvement while providing opportunities for U.S. farmers and ranchers.
Jordan Fife/President of Trading, Biourja: There's so many people there. So obviously that means if they all start driving, there's huge demand there. They all start eating more proteins. There's huge demand there for agriculture and everything like that, even though a lot of India is vegetarian. There's other ways to get it in there. But they are emerging in a way that I think China has already happened. They're in that first wave of true industrialization over the last 10 years, how much they've invested in infrastructure and highways to link Mumbai and New Delhi and all that. It's truly incredible see, and then from an ethanol standpoint, obviously they only import industrials, right now they do not import fuel grade, if that were to ever change that is the the silver lining to every ethanol producers cloud right now, if India were to step in and say we want more FL, it would be a game changer. China used to import more. And now they're building their own ethanol plants. Currently, India has ethanol plants that make it from molasses from sugarcane. But it's just they don't have the infrastructure to do it. They could take more tomorrow, Modi, their Prime Minister has also increased the amount of ethanol they do take into their cars. They're not hitting it right now. But the fact that they're trying to do it is encouraging. So either one of two things is going to happen in my opinion, one, they eventually say you can import fuel or two, they say Hey, could you come help us build these things and show us how to run them? Either way? I think it's going to be good for us.
Paul Yeager: How long have a good for the US?
Jordan Fife: I don't think India is done growing? So really, the question is, how long will they keep expanding? And I think they'll continue to do that for the next 20. So 20 to 30 years. Now, if they can industrialize that much and they do grow sugarcane and everything like that, they could potentially start making their own. So it just depends on the industrialization, you're gonna need it near there populous areas, you're gonna need to build these plants in and around Mumbai, New Delhi, Hyderabad, where there's major metropolitan areas to make a dent, or they need to increase their, their ports cities to take in more and build tanks. It'll take some investment from somebody, but somebody's gonna get it right and probably make a ton of money. Do you see India importing more of our goods? Or our insight on goods?
Paul Yeager: You talked about improving refineries, things like that? That's what I mean.
Jordan Fife: I think the insights are probably the easier way. And look, you know, if you look at America right now, the way it's trending, tech is kind of one of our biggest exports, right? That's more idea based than it is goods base, you know, we've kind of shifted a little bit from, from raw materials and everything like that, you know, to a more tech related economy. So I expect that that will continue to fall through. And it's easier, right. But the goods are harder, like you talked about, India doesn't need to improve their ports, they cannot intake in more if there's a bottleneck, so they need to work to the bottom with that, once they do that, I think there is a very good opportunity, again, to have some sort of trade agreement with them. Since they are again in Asia, that it's a natural drawl to China. But China is not really a huge exporter, either, you know, they're a large importer, as well. So it really comes down to Russia and into the Middle East. And that's going to be more oil based to begin with. As far as agricultural products go, I mean, in South America, they're going to try to draw off as much as they can, and then do as much as they can domestically. But I was there, I drove around in the country, I went to several farms. They've got a long way to go. I mean, they really are still doing like water buffaloes and plows. That's not facetious at all. That's just the way it is right now in a lot of places over there.
Paul Yeager: Is there any comparison India is to another country? Has there been somebody else that's followed? This template or somebody 50 years ago that, yep, here comes India. This is what happened in that country.
Jordan Fife: I would put it as the one that I would put it with, and maybe I'm completely wrong, but it feels like it is our neighbor in South Mexico. You know, they had, they've really come along, obviously, you know that if you look at Mexico's refining, you look at their agricultural, you look at their infrastructure, you look at telecommunications, you look at the internet, everything is you know, I don't know the last time you're in Mexico. But if you go to a developed area of Mexico, it very much feels like you're in the United States. If you're in Cabo or Cancun or any of those, you're in the United States with a nice beach, right? Safe and everything like that. It's got its problems, but what country doesn't. But I would say it's probably like a 50 year ago, Mexico, where it used to be much more rural. And now we're seeing a lot of consolidation in Mexico City and all these other cities, Monterey, you're seeing this consolidation and a willingness to work with us with the United States. They're obviously one of our largest trade partners. So yeah, I would hope that it goes that route.
Paul Yeager: The full discussion will be part of the MtoM release on Tuesday.