India and Pakistan soymeal: different fates in a global soybean glut
Led by Brazil's huge soybean crop this year, Pakistan, traditionally a soymeal importer, has started soymeal exports after importing large volumes of soybean in recent months. In contrast, India, which used to be a major exporter of soymeal, has entered into contracts to import from China.
"An initial sale of Pakistani-produced soymeal has been made to Sri Lanka," one European trader told Business Recorder. "Pakistan is now in the market to export up to 50,000 tonnes of soymeal."
Pakistan has been a major buyer of soybean this year as import duties and local sales taxes have made soybean imports for local crushing more lucrative than soymeal imports. Oilseed processors in Pakistan are also increasing soybean crushings to replace rapeseed/canola, traders said.
"The soymeal offered for export is being produced from soybeans imported for crushing from the United States, Brazil and Argentina," one trader said. "Rising imports of soybeans have created a surplus of soymeal and Pakistan looks like becoming a new player in the soymeal export market."
Soybean is imported by Pakistan mainly for vegetable oil production. But when crushed, soybean have a larger yield of meal than rapeseed/canola, making them a preferred choice among many crushers. Consequently, rapeseed/canola is being imported by the country in reduced volumes, traders said.
Pakistan's soybean imports are expected to rise to over 1.5 million tonnes in the 2015/16 season, from just 450,000 tonnes in the 2014/15 season.
Neighbouring India, on the other hand, which used to be a major soymeal exporter, has entered into contracts to import about 10,000 tonnes from China, as global prices have dropped sharply at the expense of domestic rates, Hellenic Shipping News reports.
Indian soymeal is selling at over US$533 per tonne in the domestic market, while the same is available in international markets at less than US$480 per tonne.
Indian soymeal sells at a premium in international markets as they are produced from non-genetically modified soybean.
India's soymeal exports have plunged by nearly 62% in April-September 2015-16 as compared to the same period last year, data from the Solvent Extractors Association showed. In 2014-15, India exported 0.65 million tonnes of soymeal, which was nearly 3.43 million tonnes in 2012-13.
India exports soymeal to Southeast Asian countries such as Vietnam, Thailand and Indonesia besides its South Asian neighbours.