The Hindu Business Line : Setback in Asian soyameal offtake on bird flu fears

OUTBREAK of avian influenza in as many as 10 Asian countries is threatening feed consumption by the poultry sector. Feed use in the Asian region is likely to decline with the disease causing considerable concern for the welfare of the region's poultry sector.

The most severe consequences for feed use in the region could come from the loss of poultry exports, the Economic Research Services of the US Department of Agriculture (USDA) has noted. Most of the world has banned imports of live birds and uncooked poultry meat from infected countries. The duration of these restrictions depends on how long it takes to contain the disease.

For Asia as a whole, the year-to-year increase in soyameal consumption has been scaled back by over 700,000 tonnes from 10.6 million tonnes to 9.8 mt, leaving the projected growth at 7 per cent instead of the 9 per cent earlier.

Last year, Thailand exported nearly 40 per cent of its poultry production, which made it the world's fourth-largest poultry exporter. The country has already culled significant portion of the total flock. USDA has forecast Thai consumption of soyameal in 2003-04 down by 400,000 tonnes to 3.2 mt

In Indonesia too, a substantial cull of chickens is expected because of bird flu, as a result of which soyameal imports are not expected to grow from last year's level of 1.5 mt Conversely, a deficit of meat supplies there may encourage more consumption of soya foods in Indonesia, raising soyabean imports to around 1.45 mt

There is expectation that meat consumption in many Asian countries may shift to towards pork (excluding the mostly Muslim countries of Indonesia and Pakistan). "A substitution with pork could require just as much, if not more, consumption of soyabean meal as poultry,'' USDA observed.

Enquiries for Indian soyameal dry up: With major importing countries in the Far East exercising utmost caution in trade deals in the wake of bird flu, Indian soyabean extraction exporters have turned a worried lot. "No fresh enquiries are coming in from the Asian markets," said the representative of a large trading house.

Indeed, sellers are willing to and have begun to scale the export prices down. What was offered at $260 a tonne FAS (free-alongside-ship) earlier, is now offered at $255 a tonne with the prospect of a further decline, he pointed out adding, "Yet no buyers are in sight".

Fortunately, there has been no cancellation of contracts or deferment of shipment to the Far East markets so far. Shipments are going on as per schedule; but no fresh orders are coming through.

Traders refused to quantify the possible loss of export business for the reason that the situation was still fluid and there was no way to know when the problem would be contained and normalcy in trade transactions restored.

"Until recently, we were optimistic that India's total soyameal exports during crop year 2003-04 would exceed 35 lakh tonnes and move close to 40 lt; however, on current reckoning, shipments may aggregate 32-33 lt," observed a multinational buyer. Even that would be a significant improvement over last year's dismal performance of about 13 lt because of a sharp reduction in crop size.

Many believe, if the disease is not contained soon, processors and exporters here may be forced to nurse large unsold stocks. Slowdown in export shipments is bound to affect soyabean prices.

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