Shipments in first 8 months of the calendar year dip 54.55%.
Soymeal exports are likely to halve in the December quarter on lower demand from Asian countries. These countries have significantly reduced expenditure on animal feed due to the global economic slowdown.
Indian exporters have so far signed contracts for exports of 650,000-700,000 tonnes of soymeal to China, Japan, Vietnam, South Korea, Indonesia and Thailand during the last quarter of the current financial year. According to data collected by the Solvent Extractors’ Association (SEA), they had shipped 1.39 million tonnes and 1.20 million tonnes in the corresponding period of 2008 and 2007, respectively.
According to traders, contracts were signed two months in advance last year, and that is why they escaped the negative fallout from the Lehman Brothers failure in September 2008. So, there was no impact on exports in the following quarter. However, overseas importers later abstained from signing fresh contracts, which resulted in a dramatic decline in exports since January this year.
Shipments in the first eight months of the current calendar year nosedived 54.55 per cent to 1.6 million tonnes compared to 3.52 million tonnes in the comparable period last year.
Soymeal, a by-product of soybean production, is used overseas in a mix of animal feed to add nutritional value. India exports more than 70 per cent of its output.
“Investment on animal feed has been cut significantly in exporting destinations as part of a series of measures to soften the impact of the global economic meltdown. The trend is likely to continue until the global economy recovers fully,” said an exporter.
Also, local traders held stocks in large quantity in anticipation of higher prices during the lean sowing period. As a consequence, crushing mills could not procure adequate quantity during this season, resulting in lower meal production this year, he added.
Meanwhile, soymeal production in India is likely to rise during the third quarter as harvesting of the current kharif crop has begun. According to industry estimates, there is a carryover stock of 800,000 tonnes.
India’s soybean production is estimated at around 10 million tonnes this year as against 8.9 million tonnes last year.
Soybean output in the US, the world’s largest grower and exporter, is estimated to hit a record 3.245 billion bushels (88 million tonnes) this year, up 9.7 per cent from last year, according to the estimates of the US Department of Agriculture (USDA). The crop was damaged due to drought this year in Argentina and Brazil, the second and third-largest producers.
Soybean meal prices, down 16 per cent in the last one year, may decline further on record output in the US. Soybean meal for delivery in December declined to $278.50 a tonne in Chicago, compared to $360-$365 a tonne recently.
Source : Business Standard