December 30, 2013

India expects 2013-14 soymeal, corn exports to drop 28%

India's soymeal and corn exports are expected to drop more than a quarter to six million tonnes in the year to September 2014, as buyers opt for cheaper supplies from South America.

Latin American producers, who compete with India in the export of animal feed to markets such as South Korea, Japan, Vietnam, Thailand and Iran, have already raised sales to Asian buyers.

"Soymeal prices in India are ruling high on lower soy output as rains in October caused severe damage to the crop during the start of harvest," said Rajesh Agrawal, chief co-ordinator at Soy Processors' Association of India.

Indian soymeal, main protein ingredient in animal feed derived by processing soy, is priced at around US$570/tonne, about US$20 higer than supplies from South America.

In 2013-14, India is expected to sell three million tonnes each of soymeal and corn, a drop of almost 28% from a total 8.3 million tonnes exported a year ago, traders said.

A 14% drop in India's soymeal output to 7.8 million tonnes in 2013-14 is also expected.

While corn output is expected to be slightly higher at 22.5 million tonnes, overseas sales by Asia's top exporter of the grain will come off about 38% on-year amid high prices.

Due to ample supplies from US, Brazil and Argentina, Indian corn is priced at about US$220/tonne, also around US$20 more than global prices.

"Despite a good crop year, India may not be able to export much because domestic prices are higher and the international market is flooded with cheap American supplies," said Amit Sachdev, India representative of the US Grains Council.

Traders said domestic demand for soymeal and corn was likely to remain flat as a slowdown in the Indian poultry industry, the biggest consuming sector, would cap consumption.