The Hindu Business Line : Oilmeal exports likely to fall on global glut

OILMEAL exports are likely to be lower during the current fiscal, though they are higher during the April-October period. Realisation from exports is also expected to decline during the fiscal as the global market is faced with a glut.

"We hope oilmeal exports could range between 25 lakh tonnes (lt) and 30 lt this fiscal. Last year, we did well because it was an unusual period," said Mr B.V. Mehta, Executive Director, The Solvent Extractors Association of India.

During April-October, oilmeal exports totalled 13.58 lt against 5.25 lt during the same period a year ago. However, the shipments have tended to decline since August, with exports in October slipping by over 60 per cent to 47,725 tonnes.

Exports for the first seven months were up since shipments during April-July increased nearly five times. During April-July, exports totalled 11.63 lt (2.18 lt). It was because India had good stocks, while countries such as Argentina, the US and Brazil did not have any carryover stock during the period.

"Currently, things are looking a bit down. One is increased competition from Argentina, Brazil and the US. Two, we can't compare with last year since it was an unusual one," Mr Mehta said.

Last year, India primarily gained on lower soyabean crop in the US and Argentina and higher freight charges. But it was also unusual as the country had a higher crop of 72 lakh tonnes for soyabean and it was topped with record prices.

"This time, extraction units are facing problems of bean availability, though production is normal. Farmers are holding back hoping for better prices. They are selling only if they need cash. As a result, crushings are lower," Mr Mehta said.

Currently, soyabean is quoted at Rs 12,300-12,400 a tonne in Indore, while during the same time last year, it ruled at 13,350. Rapeseed is quoting at least Rs 6,000 a tonne less at Rs 17,000, while sunflower seed is down Rs 1,000 at Rs 18,500. However, groundnut is up Rs 3,500 at Rs 21,500.

Soyabean production is projected around 74 lt, while groundnut is seen down by 13 lt at 37.10 lt.

"Also, this time, arrivals are in phases as a dry spell affected sowing. Crushings are expected to pick up from now onwards," he said.

On the price front, while soyameal is quoting at least $50 a tonne lower, rapemeal is down $25 a tonne. Currently, soyameal is quoted at $186 a tonne f.o.b and rapemeal at $102.

"We will be happy if soyameal can recover to $190-200 level. We don't think prices can go beyond that," Mr Mehta said.

Industry sources said it would be tough this fiscal to repeat even the performance of groundnut meal exports. "Last year, it gained because prices of soyameal and rapemeal were firm. And shortage forced buyers to groundnut meal," they said.

On demand from China, Mr Mehta said it could buy only a small quantity. "China buys more of soyabean. It may buy small quantities but it will depend on the situation in the market," he said.

Of the oilmeal exports so far, soyameal shipments are a little over eight lt, rapemeal around four lt and groundnut meal about one lt.

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