India's soyameal exports could fall by at least a fifth in 2017/18 from a year ago as a rally in local soyabean prices and a firmer rupee make shipments from the south Asian country pricey for overseas buyers, industry officials said. Lower exports from India will help major growers like the United States, Argentina and Brazil increase sales of the animal feed to Asian buyers like Bangladesh, Vietnam and Japan.
"We are not able to sign new export contracts. The price difference is huge between Indian and the US or South American origin crop," Manoj Agrawal, managing director at exporter Maharashtra Oil Extractions Pvt Ltd told Reuters. Soyameal prices in India have risen over 15 percent in the past two months to $405 per tonne on a free-on-board (FOB) basis following a rally in soyabean prices. Global soyameal prices edged up about 1 percent over the same period to $324 a tonne.
The country's soyameal exports could fall to 1.4 million tonnes to 1.6 million tonnes in the 2017/18 marketing year started on Oct. 1, down from 2 million tonnes a year ago, three dealers with global trading firms told Reuters. India has been a major supplier to countries like Japan, Bangladesh, Nepal and Vietnam, where its meal is sought because of lower freight rates and the ability to supply small quantities, said B.V. Mehta, executive director of a Mumbai-based trade body Solvent Extractors' Association (SEA).
Indian meal once accounted for nearly a quarter of Southeast Asian imports, but its share has been falling due to rising local soyabean consumption and stagnant production. Soyameal output this year is expected at about 7 million tonnes, with local consumption of 5 million tonnes, the Soyabean Processors Association of India (SOPA) estimated.
India's soyameal exports were robust at the start of the year, jumping more than 14 percent from a year ago to 579,294 tonnes from October to December, according to SOPA data, as soyabean prices were subdued early in the season.
However, prices have since jumped and shipping 100,000 tonnes a month from February would be a challenge if soyabeans remain at current levels, said a Mumbai-based dealer with a global trading firm, who was not authorized to speak to media.
Soyabean prices surged 17 percent in the past two months due to limited supply and robust demand from oil mills after the government nearly doubled an import tax on edible oils, dealers said. A rise in the Indian rupee to a nearly 30-month high has slashed exporters' margins, said D. N. Pathak, SOPA executive director.
Mehta said some relief has come from a government move in December to raise the incentive for soyameal exports to 7 percent from 5 percent, which will help oil mills offset the impact of strong rupee. The poultry industry is the main domestic buyer of soyameal, and while industry demand has been rising over the past few years it is not sufficient to absorb the country's entire soyameal output, cautioned exporter Agrawal. "More exports are required to keep soyameal and soyabean prices stable," he said.