February 3, 2012

India's soy prices to rise on Chinese demand

India's soy prices are expected to retain the gains today (Feb 3) on the back of raising Chinese demand as it continues the expansion of 12 million tonnes of oilseeds crushing capacity.

This indicates the increasing demand for soymeal in china and also South East Asian countries which are major meal importers from china. When the demand side is stronger supply in 2012 is weaker due to drop in production over Brazil and Argentina regions.

Further soy production estimates are cut in Brazil by ABIOVE is also supportive for prices to rally at global platform whose effect can be reflected on Indian soy prices.

IGC has released grains production estimate where global soy production is still lower at 257 million tonnes down by 2.2 million tonnes with major drop attributed from South American regions. The major trigger for buying in Indian market meal export demand is absent which might limit steep upside price movement. Imports of canola meal from Europe are reported to have increased in china to substitute for the meal imports bans from India. However quarantine expert panel from china is visiting India shortly which might check the meal crushing standards. This might further result in lift of the ban.