March 12, 2012

 

 

In order to meet aggressive export demand for soymeal, India has crushed more than half of its 2011/12 soy crop and is likely to start the new marketing year in October with meagre carry forward stocks of beans, a senior industry official said.

 

"Around 6.5 million tonnes of soy have already been crushed out of total arrivals of 7.5 million tonnes," Rajesh Agrawal, chief co-ordinator at the Soy Processors Association of India (SOPA), told Reuters in an interview.

 

India is likely to produce 11.93 million tonnes soy in the current crop year ending in September 2012, higher than last year's 10.12 tonnes, estimates SOPA, a top trade body. Though the expected output is nearly 12 million tonnes, at least one million tonnes of this would be used as seed for plantation of next year's crop, he said.

 

Peak soy arrival season is over and farmers are now releasing their stocks slowly, he said. Firm overseas markets and an estimated drop in local rapeseed crop are encouraging farmers to hold their stocks, Agrawal said.

 

However, robust export demand for soymeal and a rally in soyoil have had oil millers buy beans aggressively. On Friday (Mar 9) soy futures hit a record high of INR2,912 (US$58.36) per 100 kilogrammes. Soy is crushed to produce meal and oil.

 

Millers were earlier concerned about soymeal exports as Beijing in January halted imports from India after it found a hazardous chemical in the product last year. But the ban is unlikely to have an impact on overall exports, which are likely to remain steady at last year's level, Agrawal said.

 

"China's decision is not impacting overall exports. Many new markets are opening up, especially in Africa."

 

India can export 4.5 million tonnes soymeal in 2011/12 year ending in September, including four million tonnes by sea route and 500,000 tonnes by road and rail to neighbouring countries like Pakistan, Bangladesh and Nepal, he added.

 

In 2010/11 India exported 4.1 million tonnes of soymeal by sea, SOPA data showed. In the current year so far to February Indian exports stood at 2.32 million tonnes by sea, lower than 2.58 million tonnes the same period a year ago. The global rally is now buying exports, he said.

 

Chicago soy futures rose to their highest in more than five months on Friday, on track for a fourth straight week of gains, as the market was supported by strong US export sales to China.