Soyameal exports crashed by 41.3% in January from a year before on a drop in crushing, as farmers held back soyabean supplies, the Soybean Processors Association of India (SOPA) said on Thursday.
Coming on the back of an annual 8% drop in December, the decline in January exports to 3,64,443 tonne drove down shipments so far this marketing year that started in October by 8.8%, the SOPA data showed.
India ? the world’s fourth-largest soyameal supplier ? exported 1.54 million tonne (mt) in the first four months of the current marketing year, compared with 1.69 mt a year before. Exports in October and November, however, had witnessed a 26% rise from a year before.
These data do not include supplies to Nepal, Pakistan and Bangladesh by rail or road.
Senior trade executives said farmers have held back stock anticipating soyabean prices to soar further, compounding concerns of exporters facing stiff competition in a market already awash with South American supplies.
Exporters, already feeling the heat due to lower prices overseas following a bumper South American harvest, fear outbound shipments will suffer despite a weak rupee if the farmers continue to hold soyabean stock or seek higher prices, trade executives said.
At around $570 a tonne, the price of India’s soyameal is already higher by roughly $15 than South America’s, a trader said.
Domestic farmers feel prices would move up in the coming days, as the industry expects a 5.8% drop in production from an estimate earlier this year.
According to SOPA’s revised estimate, soyabean output may drop to 12.23 mt in 2013-14, compared with 12.98 mt estimated earlier, thanks to excess showers in key-producing regions. Near-month soyabean futures contract on NCDEX has gained almost 3% since January to R3,881 per quintal.
Soyabean is crushed into soyameal for animal feed and into soyaoil for cooking and alternative fuel.
Soyameal is added to poultry feed as a form of protein to boost the birds? growth. The country typically exports around 70% of its annual production.
The country will likely produce a bumper 11.34
mt in 2012-13 on good planting, compared with 10.65
mt, according to the SOPA estimate.
India competes with Brazil and Argentina for soyameal exports to countries including Japan,
Vietnam, South Korea and China.
However, suppliers in India usually 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.
Still, a bumper South American crop has potential to depress global prices and severely dent India’s competitiveness.
