September 29, 2011

 

India's soymeal export decreases

 

 

India, Asia's top soymeal exporter, is exporting 400,000 tonnes of new season soymeal, about half of what it generally sells around this period because of ambiguity over demand and decreasing prices, according to a senior trade official Wednesday (Sep 28).

 

Rajesh Agrawal, chief co-ordinator at the Soybean Processors Association of India said that people are not sure about prices and that everyone is going very cautiously and slow on exports front due to volatile prices.

 

The deals for 400,000 tonnes were signed at free on board (FOB) price of US$365-400 per tonne, mostly to Asian buyers for shipments by January.

 

Indian soy meal is preferred by Asian buyers over Latin American supplies as it is derived from non-genetically modified soy. Geographical proximity also makes Indian soy meal less expensive for Asian importers.

 

India has been selling soy meal on discount to prices from Argentina and Brazil, he said.

 

FOB soy meal price fell over 10% in September to about US$360 per tonne, and those levels are likely to fall further in October when the new supplies rise.

 

But a sharp drop in price is unlikely for a long time, Agrawal said.

 

He also said that even if they will go down, it will be temporary because they are very competitive at the current price and there is good demand from Japan, Pakistan and Bangladesh.

 

A drop in prices is unlikely to hurt Indian exporters much as the Indian rupee is weakening against the US dollar alongside sliding domestic soy prices, Agrawal said.

 

The partially convertible rupee has slipped nearly 10% from its strongest point late July, primarily on dollar outflows out of emerging economies like India to safe havens.

 

Soy arrivals have started in the top two producing states of Maharashtra and Madhya Pradesh and supplies are likely to rise substantially in October, Agrawal said.

 

Oil millers crush soy to produce oil and meal, used mainly as an animal feed.

 

India is the world's fifth-biggest soy producer after the US, Brazil, Argentina and China, and it contributes about 5% to global output.

 

Domestic demand for soy in India, fuelled by a growing population and economic wealth in Asia's third-largest economy, will result in the country becoming a net importer by 2015, a global producers' lobby has said.

 

Japan, Vietnam, Thailand and Iran are key buyers of Indian soy meal.

 

"Even if soy meal price goes down, exports will not go down. They will rise. Soy meal availability will rise due to a bumper soy crop," Agrawal said.

 

He refused to provide the output number as the association is doing a farm survey, the result of which is likely to be released this week.

 

Atul Chaturvedi, chief executive of farm business Adani-Wilmar on Saturday (Sep 24) said the country could produce more than 11 million tonnes of soy in 2011/12 against 10 million tonnes a year ago.

 

India's soy meal exports are seen at more than five million tonnes in 2011/12, compared to four million tonnes in 2010/11 year ending in September, Chaturvedi said.

 

The most-active soy October contract on India's National Commodity and Derivatives Exchange ended 2.01% lower at INR2,164 (US$44.23) per 100-kilogramme on Wednesday (Sep 28), the lowest close for the near-month contract nearly in a year.

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