September 10, 2007

Southeast Asia and China buying Indian soymeal at record prices

Indian exporters are signing fresh soymeal export contracts at record prices of $330-$340 per tonne, including cost and freight, to destinations in southeast Asia and China, a top trade official said on Friday (Sep 7).

India has received orders for close to 500,000 tonnes of soymeal from the new crop, which is to be harvested in October, Davish Jain, chairman of Central Organisation of Oil Industry and Trade, said.

Rising demand could double exports to one million tonnes by the end of September, he said, more than three times that of the same time last year.

Calling it a bull market, Jain said FOB quotes for Indian soymeal have also risen to US$290-US$300 a tonne, 50 percent higher than a year ago.

Asia, particularly China, is turning to India for soymeal supplies as freight rates for cargoes from the US and South America, the traditional soy suppliers, reach record rates.

Lower than expected soy production in China due to droughts in the north-eastern regions is also spurring traders to source for soy from India, where soy production has been abundant.

With prices of India's high protein meal at levels close to Argentina's low protein meal, it is no surprise which one traders would buy.

By November, India should be meeting most of Southeast Asian demand for meal, he added.