April 15, 2013
Demand for Indian soymeal has slowed significantly due to the higher prices, and buyers are seeking alternative South American supplies, the dealers said.
"Most deals were signed between US$560 and US$580 per tonne," said an exporter based in the central city of Indore, India's soy processing hub.
"Then soy prices were around INR33,000 (US$610) per tonne. Now executing those deals is difficult. Soy prices have spiked above INR40,000 (US$734)," said the exporter, who declined to be named, in line with his company's policy.
India's soymeal exports in April are likely to fall to 200,000 tonnes, down 36% from a year ago, unless buying from Iran improves, said Rajesh Agrawal, chief co-ordinator at trade body the Soybean Processors Association of India.
"Indian soymeal is very expensive. We are charging a premium of US$180 per tonne over South American supplies. The higher price is deterring Iran and other buyers. One or two shipments to Iran have already been delayed." Agrawal said.
Iran, battling Western sanctions aimed at discouraging its nuclear programme, is India's biggest soymeal importer. It bought 870,776 tonnes of soymeal in the year ending in March, or four times the year-earlier figure of 216,335 tonnes, after the two countries agreed to settle trade in rupees.
India has been paying for Iranian crude oil imports in rupees, which Iran in turn uses to buy Indian commodities, including rice and soymeal.
"Farmers are not bringing beans into the spot market as they expect prices to rise, while oil mills have to buy at higher prices to fulfil their soymeal export commitments," said Vedika Narvekar, a senior analyst with Angel Commodities Broking.
Indian farmers hold around 2.5 million tonnes of soy, up from 1.3 million at the same time last year, Agrawal said.
Asian buyers usually prefer Indian soymeal over Latin American supply because it is not derived from gene-modified seeds. Other key buyers of Indian soymeal in 2012-13 were Japan, Vietnam and Thailand.
