July 26, 2013

Following higher soy acreage across India at 11 million hectares as against 8.62 million hectares last year and lower exports demand, India's soymeal prices are likely to come under pressure. 

This is according to data from Solvent Extractors Association of India.

"Soymeal price has been on the decline since May 2013 as exports demand dropped, thereby increasing domestic supply. With monsoons above normal in key soy areas and acreage higher compared to last two years, the prices are likely to remain subdued. We believe, the price could well drop below INR28,000/tonne (US$476) on ex-Indore basis," said Raju Choksi, Vice President (Agro Commodities), Anil Nutrients Ltd.

As per data from Solvent Extractors Association, soymeal exports during April-June 2013 period fell by almost 36% at 4.1 lakh (410,000) tonnes as against 6.37 lakh (637,000) tonnes in the corresponding period of last year. The data showed exports to Iran, the biggest importer of soymeal from India, fell by around 13% for the period under consideration.

According to the fourth advanced estimates released by the government on Monday (Jul 22), the soy crop size was 146.8 lakh (14.68 million) tonnes in 2012-13 against 122.14 lakh (12.214 million) tonnes in 2011-12. "With higher acreage this year, we believe the crop size could well be close to 160 lakh (16 million) tonnes or around 10% higher than last year. This would easily put pressure on prices in 2013-14, if exports don't pick up as they did in the last quarter of 2012-13," said Choksi.

Soymeal for new season is being traded at US$455/tonne for delivery during November-December. This is against US$545/tonne for ready delivery.