May 16, 2012

 

India likely to export 500,000 tonnes soymeal to Iran

 

 

As the Middle Eastern nation scouts for feed material supplies following western sanctions, India will likely export between 500,000-600,000 tonnes of soymeal to Iran this marketing year.

 

The country, one of Asia's top soymeal exporters, expects to ship a total of around 4.5 million tonnes in the year ending September 30, up from around 4.1 million tonnes last year.

 

India has already exported around 200,000 tonnes of soymeal to Iran in the last two months, Rajesh Aggarwal, a spokesman for the Soy Processors Association of India, told Dow Jones Newswires. "They [Iran] are buying about 100,000 tonnes each month."

 

Iran is paying a premium of around US$20/tonne for Indian soymeal over international prices, setting a higher price benchmark for supplies from the country, he said.

 

India and Iran recently arrived at a payment mechanism, as tightening western sanctions made payment in dollars difficult. The mechanism allows Indian oil importers to make 45% of their payments in rupees, which Iran parks in a local bank and uses to settle payments to Indian exporters.

 

Last week, an Iranian trade delegation visited India to buy, rice, sugar, soymeal and wheat. India is also keen to export agri-commodities following a bumper crop. While the higher price of soymeal that Iran is paying is benefiting Indian exporters, the local poultry industry is crying foul.

 

D. Sudhakar, president of Andhra Pradesh Poultry Federation, said that local prices of soymeal--considered a vital protein ingredient for poultry--have jumped to INR32,000 (US$590) per tonne from INR18,500 (US$342) per tonne in the past two to three months.

 

The southern state of Andhra Pradesh is a hub of India's poultry trade.

 

"We are not able to maintain even the cost of our production," he said, adding that the poultry industry has urged the federal government to streamline exports, mainly to Iran.

 

Iran emerged as the largest importer of Indian oilmeal in April, surpassing Japan. Demand for Indian soymeal was equally strong from Japan, South Korea, Pakistan and Bangladesh, Soy Processors Association's Aggarwal said.

 

The expectation of a smaller crop in South America has also helped Indian soymeal exports. South America's soy output will likely fall more than 14% due to dry weather, the United Nations' Food and Agriculture Organisation said earlier this month.

 

However, India's soy production is expected to rise about 12% to 10.65 million tonnes, according to the Central Organisation for Oil Industry & Trade.