October 11, 2011

India's soymeal exports surge over 75%

Aided by a record soy harvest and a revival of overseas demand, India's soymeal exports surged more than 75% to 4.12 million tonnes in the marketing year through September.

According to the Soyabean Processors Association of India (SOPA) the country had exported 2.35 million tonnes of soy meal in 2009-10. The data don't factor in exports to Pakistan, Nepal and Bangladesh by rail or road. Industry executives said around 6-7 million tonnes of soy meal have been despatched to these three countries by rail or road in 2010-11. The country reaped a record soy harvest of around 12.65 million tonnes in the last crop year through June, according to the government estimate.

The country typically exports around 70% of its annual production. The industry executives expect even higher soy meal exports of around five million tonnes, including exports to neighbouring countries by rail and road, in 2011-12 on robust global demand as well as another good harvest.

According to the agriculture ministry data soy planting has climbed by 11% this summer from a year before on widespread monsoon showers, boosting hopes that the country will harvest a bumper crop in 2011-12 as well despite some crop losses due to excessive rainfall in a few pockets.

In its initial projection, SOPA pegged soy output in 2011-12 at 11.65 million tonnes, although it will review its estimate in the second week of October.

SOPA co-ordinator Rajesh Agrawal said that their prices are globally competitive and demand also looks strong. He expects soy crushing to go on well in 2011-12 as carryover stocks will be less than the 2010-11 level.

The country's soy meal exports bounced back in 2010-11 after a slump in the previous year due to less crushing of soy after a fall in its prices.

India competes with Brazil and Argentina for soy meal exports to countries including Japan, Vietnam, South Korea and China. However, suppliers in India have an edge over their South American rivals in terms of freight differential due to the country's proximity with key buying nations, the executives said.

Soy meal prices are ruling around US$400 per tonne freight-on-board, which is globally competitive, he said, adding that good prices would lead to higher soy crushing by the domestic industry. Traders are also looking to export more to China, considering its huge appetite for oil meals to meet growing demand of its poultry sector, from the current level of more than 536,000 tonnes a year, the industry executives said.