July 2, 2011

 

India's rapeseed meal exports to China may drop over quality worry

 

 

Indian rapeseed meal exports could fall after its biggest buyer China raised quality concerns over its shipments.

 

More than half of India's 936,238 tonne of rapeseed meal exports went to China in 2010-11, but that figure could come down if the issue over quality was not resolved soon, Indian traders said on Friday (Jul 1).

 

They could not immediately say how much exports could fall if China stopped buying from India, the world's fourth-biggest rapeseed producer.

 

China issued a warning last week over imports of rapeseed meal from India and palm meal from Malaysia, saying it had found traces of a hazardous chemical in shipments from both nations.

 

"The warning will hit Indian rapeseed meal exports as China is the numero uno buyer of the oilmeal," a trader said.

 

Indian traders said Chinese quarantine authorities in the southern province of Guangdong were inspecting two Indian cargoes totalling about 30,000 tonnes for malachite green, a chemical banned in animal feed production in China.

 

China's quarantine bureau has said future cargoes found with the chemical (malachite green) would be returned or destroyed.

 

"We are aware of the issue and studying the matter," said an executive director of the Mumbai-based trade body Solvent Extractors' Association of India.

 

For the first two months of the current fiscal from April, India exported 272,314 tonnes of rapeseed meal, a rise of 49.3% from the same period last year.

 

The higher exports were possible due to a better harvest in 2011 and higher demand from China which took in about half of that in April-May.

 

India's farm ministry forecast a harvest of 7.4 million tonnes of rapeseed in 2011, up by 12% from the last year.

 

Top export destinations for Indian rapeseed meal are China, South Korea, Thailand and Indonesia.

 

These countries prefer Indian rapeseed meal, used as animal feedstock, as its rapeseed crop is free from any genetic modification and has higher protein content than soymeal.

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