After a near 26% rise in the first two months of the marketing year that started in October, India’s soyameal exports dropped 8% in December as farmers held back stock, compounding worries of exporters facing stiff competition in a market already awash with South American supplies.
India ? the world’s fourth-largest soyameal supplier ? exported 4,70,799 tonne in December, compared with 5,10,698 tonne a year before, according to Mumbai-based Soybean Processors Association of India (SOPA).
The exports in the first three months of the marketing year, however, remained up 9.7% at 1.18 million tonne, thanks to higher shipments in the previous two months. These data do not include supplies to Nepal, Pakistan and Bangladesh by rail or road.
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 $575 a tonne, the price of India’s soymeal is already higher by roughly $20 than South America’s.
?Lower arrival of soyabeans in the domestic market and falling profitability in crushing affected exports. Farmers held back soyabean stock last month on anticipation of higher prices,? said Rajesh Agrawal, co-ordinator of SOPA. India exported 3.47 million tonne of soyameal in the 2012-13 marketing year, compared with 3.62 million tonne in the previous year.
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 million tonne in 2013-14, compared with 12.98 million tonne estimated earlier, thanks to excess showers in key producing regions.
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. India will likely produce a bumper 11.34 million tonne in 2012-13 on good planting, compared with 10.65 million tonne, 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.
