November 23, 2012
As farmers hold on to stocks anticipating strong local demand will bring them better prices, India's 2012-13 soymeal exports are likely to remain almost unchanged from year-ago levels, despite a bigger crop.
Worries that shipments from India, Asia's biggest supplier of soymeal, which exported a record 4.5 million tonnes in 2011-12, will not rise as initially expected, have driven up prices of the animal feed more than 12% in about a month.
Despite a slow start to annual monsoon rains, India harvested a record 12.6 million tonnes of soy in 2012, Agrawal said, up 8.6% from 11.6 million a year ago. His estimate for both years was slightly below a prior SOPA projection.
The Central Organisation for Oil Industry and Trade, another industry body, pegs this year's output at 11.3 million tonnes, up 6.6% from 10.6 million a year ago. But farmers are building stocks instead of offloading them, slowing exports since the new season began in October, Agrawal added.
Farmers in India, the world's biggest vegetable oil importer and Asia's leading oilmeal exporter, plant soy in the rainy months of July and August. The harvest starts from October.
"We hope farmers will gradually start selling their stocks and exports will pick up. India typically faces competition from South America after February when their supplies pick up. We must make the best out of it before supplies from South America hit the market," Agrawal said.
Indian soymeal is currently being exported to Southeast Asia at about US$540 a tonne, including cost and freight, traders said, up from US$480 a tonne in end-October. China, Vietnam, and South Korea are the top buyers.
Domestic prices of soy, which is crushed to produce vegetable oils and meal for animal feed, may also climb as farmers remain reluctant to sell stocks amid hopes soymeal prices will gain on strong demand at home.
Soy prices are at about INR3,300 (US$59.87) per 100 kilogrammes and many farmers believe rates will scale up to the previous year's level of about INR4,500 (US$81.5), Agrawal said.
Changing food habits have pushed up meat consumption in India, in turn boosting annual domestic soymeal demand 10% in the past two years. Current consumption is four million tonnes, trade and industry officials said, up from about 3.5 million the previous year.
