September 25, 2006

India's soymeal US$18/tonne higher over CBOT prices

Indian soymeal is currently fetching a premium of up to US$18 a tonne over prices quoted on the Chicago Board of Trade for sales to South-east Asian destinations, traders said Friday (Sep 22).

They said Indian soymeal is currently being sold around US$200-US$202/tonne, free alongside ship, or FAS, and prices could firm in the next few weeks due to strong international demand and the high prices of the locally produced beans from which meal is extracted.

"Prices could even rise to US$210/tonne, FAS levels," said Soybean Processors Association of India Chairman Rajesh Agrawal.

He said soymeal of Indian origin is enjoying a premium because of its proximity to South-east Asian countries, which means lower freight costs compared to deliveries from the Americas.

Another trader who declined to be named said the high level of protein in Indian soymeal and the fact that it isn't extracted from GM soybeans also led to the high premiums.

Buyers in countries such as Japan prefer to buy soymeal extracted from non-GM beans.

The trader said that in recent weeks, Indian soymeal has been sold at prices ranging between US$192-US$202/tonne, FAS, for delivery between October and December.

Agrawal said on cost and freight basis, the prices at which deals have been clinched are in a range of US$225-US$235/tonne.