December 1, 2009

Indian soy exports may miss export target

According to a processors' group, India may miss a target to boost shipments by 25 percent as a surge in domestic soy prices prompts buyers to shift to South American supplies.

Shipments in the year to September may be 3 million tonnes to 3.5 million tonnes, less than the 4-million-tonne target, Rajesh Agrawal, coordinator for the Soybean Processors' Association of India, said. Exports were 3.21 million tons in the 2008-09 season.

Soy prices in India have jumped 44 percent in the past year after drought reduced production in Argentina and Brazil, the top exporters of animal feed, boosting demand for supplies from the South Asian nation. Rising India meal prices may prompt Japan and South Korea, the biggest buyers, to shift to US and Latin American suppliers.

Agrawal says soymeal, priced at US$440 and US$450 per tonne at ports in western India, is at least US$20 per tonne more expensive than that from Brazil, Argentina and the US.

January-delivery soymeal gained as much as 1.2 percent to US$318.40 a short tonne in after-hours trading in Chicago earlier this week. The commodity has gained 27 percent in the past year.

US sales of soymeal in the marketing year that began October 1 reached 4.696 million tonnes as of last week, up 72 percent from a year earlier, US Department of Agriculture data show.

According to Agrawal, Indian traders have contracted to supply about 900,000 tonnes this season and may export 750,000 tonnes by January, adding that exports in November may decline 40 percent to below 400,000 tonnes, compared with 663,776 tonnes last year.

He said farmers are holding back soy in anticipation of higher prices and daily market arrivals at around 250,000 bags of 90 kilogramnes each are 15-percent less than a year earlier.

The processors association maintained its output forecast of 9.72 million tonnes for this year, compared with 8.5 million tonnes predicted by the Central Organisation for Oil Industry and Trade.