September 29, 2014
India soymeal exports to hit record low
India's soymeal exports are expected to fall 20% to their lowest in a decade at two million tonnes in the marketing year that starts in October, with top buyer Iran turning to South America, Al Arabiya reports.
Iran has been increasing purchases from Brazil and Argentina after trade sanctions over Tehran's disputed nuclear programme were eased in late 2013, said Dinesh Shahra, managing director of Ruchi Soya Industries Ltd, India's biggest soybean processor.
A landmark deal struck in November 2013 eased some of the sanctions on trade with Iran that had reduced its options for securing food and agricultural goods to just a few countries.
The sanctions had forced India to cut oil purchases from Iran, but it remained a loyal and large customer. In 2012 as sanctions stalled dollar payments, it began settling part of its oil debt in rupees and Iran was using those to import from India.
That rupee-trade gave India an edge over other soymeal suppliers such as Argentina and Brazil, quickly allowing the South Asian country to establish a near-monopoly in exports.
India is likely to export 200,000 to 300,000 tonnes of soymeal to Iran in 2013/14, Shahra said, compared to 623,173 tonnes in the current year ending September 30.
Indian exporters had taken advantage of the trade sanctions on Iran by seeking hefty premiums over global prices, sometimes as high as 20%. However, those premiums have disappeared now as Iran has more choice over where it buys from, exporters said.