November 24, 2008
India Feed Weekly: Soy industry urges government for exemption from credit squeeze (week ended November 23, 2008)
An eFeedLink Exclusive
Soymeal rates this week were around Rs. 12,700 to Rs. 12,800 per tonne in Kota market and traded at Delhi spot market on Saturday with a downward trend at around Rs. 14,400 to Rs. 14,600, compared with last week's rates.
The prices of Feed meals - rapeseed extraction, sunflower extraction and groundnut extractions were all traded at Rs. 10,400; Rs. 8,700 and Rs. 13,000 per tonne respectively.
Prices of Pearl Millet in Delhi were also stable around Rs. 7,350 per tonne respectively.
In Delhi, prices of Ground Nut Extraction (GNE) 40 % and 45 % which were stable for the last month and traded at Rs. 13,000 and Rs. 14,000 per tonne respectively.
Price of Dry Fodder, which crossed the limit last week, came down and settled at last fortnight price of Rs. 3,500 per tonne.
Green Fodder was at Rs. 16,100 per tonne, a climb of Rs. 300 per tonne as compared to last week's price.
Indian exports of soymeal have increased by 35 percent in October against September 2008. The exports of soymeal during 2008-2009 show again a good performance as compared to the same period last year, registering an 88-percent growth.
The soymeal exports have for the first time crossed 5 million tonnes, earning over Rs. 73,000 million worth of foreign exchange for the country. The industry is upbeat for exports during the current oil year, as the soy crop has increased by almost 10 percent during the current season.
With this commendable performance to boot, the industry has urged the government to spare it from the credit squeeze by Reserve Bank of India (RBI).
The sector said that the lack of finances will reduce its buying capacity - which will curtail supplies and increase prices.
Decision to re-impose customs duty on soy oil intriguing
From about Rs. 26,000 a tonne last season, soy prices have declined to Rs. 15,000 per tonne. However, this is above the minimum support price (MSP) of Rs. 13,900 a tonne fixed by India's government.
The government's decision to impose customs duty of 20 percent ad valorem on imported soy oil has the scent of an intrigue, observers note.
Soymeal had been singled out for fiscal benefit under the Special Agriculture Production Scheme, market observers said. Under the scheme, the government of India had to pay about Rs. 2500 million as incentive to big export houses dealing in soymeal, though it was mainly intended to benefit growers and other primary producers.
The domestic industry lobby has been pressuring New Delhi for hiking the rate of duty on imported oils so that it can reap windfall gains on the stocks it is holding. The fact that the finance ministry has selected only crude soy oil for the fiscal levy created some intrigue.
Soy prices are likely to trade weak on sluggish demand and rising arrivals. But demand from neighboring nations can keep the prices on a positive footing.
Groundnut prices have stabilized at major markets and may rise further with emerging export demand.
Supply pressure from guar seed arrivals is keeping prices low despite good demand. Prices will remain steady to weak even as increase in arrivals coupled with steady demand aid this trend.
As expected, GNE 40% & 45% prices will remain stable.
In the week ahead, fodder prices (Dry and Green) may get some upward trend due to scarcity in Green Fodder resulting in hike in prices of both commodities (Dry & Green) at this week's level.
US$1 = Rs. 49.910 (Nov 24, 2008)
All rights reserved. No part of the report may be reproduced without permission from eFeedLink.