Technically speaking: Building strong domestic industries with imported raw materials

By Philip Shull, SSGA technical adviser for India

There are many parallels between the U.S. coffee industry and India’s soy food industry. This includes the small-to-nil availability of domestic raw materials for processing.

Because of this, U.S. coffee imports are a great example of how imports of a raw material can make important contributions to a national economy.

The U.S. imports about $5 billion in coffee beans (at zero tariff) each year to supply the U.S. coffee industry. According to a report from the National Coffee Association of the USA, these imports have:

• Created a domestic coffee industry worth $225 billion to the U.S economy
• Provided almost 1.7 million jobs
• Paid $28 billion annually in taxes.

These jobs and taxes are in roasting, processing, distribution, sales, etc.

Even when comparing only the value of imports to the value of retail sales, the economic benefits to the U.S. economy are impressive:

• 2020 U.S. coffee imports – $5.7 billion (https://www.worldstopexports.com/coffee-imports-by-country/)
• 2020 U.S. retail coffee sales – $45 billion (https://www.ibisworld.com/industry-statistics/market-size/the-retail-market-for-coffee-united-states/)

Given the modern and growing soy food manufacturing industry in India and the rising demand for high quality protein, there is no reason why the Indian soy food sector could not make the same kind of contribution to the Indian economy that coffee makes to the U.S. economy.

Combined with the trade info on China that demonstrates how larger soy imports can result in record domestic production, these studies can assist Indian processors in their application for a modest TRQ for specialty soybeans.

Technically Speaking is an SSGA feature that includes news and information from SSGA’s IP technical advisers for North Asia (Alyson Segawa), Southeast Asia (Hoa Huynh), India (Philip Shull) and Europe (Eugene Philhower). Please reach out to them via email. They want to hear from SSGA members!