September 4, 2008

Indian soymeal exports are likely to sell at US$10-$30 discount to CBOT prices due to competition from Argentinean meal, traders said at the 5th US-Southeast Asia Agricultural Co-operators' conference.

The conference began Wednesday in the Cambodian city of Siem Reap hosted by the American Soybean Association, the US Grains Council and US Wheat Associates.

India, Asia's biggest soymeal exporter, usually sells at a premium to Chicago prices because of the cheaper cost of shipping to its traditional customers in Southeast Asia.

But this year, the region's buyers have the option of choosing from Argentinean meal as the country's shipments were delayed by a farmers' strike this year, traders at the conference said.

Contracts for soymeal from India's new crop has totaled just 200,000 tonnes, a fifth of the level usually seen at this time of the year. Orders were also mainly from Japan and South Korea, not Southeast Asia.

Indian soymeal is quoted around US$425 to US$430 per tonne free alongside ship (FAS) at Kandla port on the country's west coast, nearly on par with Chicago prices, dealers said. Since prices are above expectations, buyers are not making their purchases, traders said.

Shipping time from India to key destinations in Southeast Asia is around 15 days, three times shorter than shipments from Latin America. This meant buyers have enough time to decide before placing their purchases. 

India is likely to export a record 5.5 million tonnes of soymeal this crop year, higher than a previous forecast, and may sell the same quantity in 2008/09. India's soy production was also likely reach 10.2 million tonnes in 2008, up from 10 million tonnes a year before.