The Hindu Business Line : Oilmeal exports likely to rebound

Chennai, Oct. 11 Export of oilmeals, which has witnessed a 12 per cent decline in the first half of the current fiscal, could rebound in third quarter in the face of higher oilseeds production and lower crop in the US and China.

“Prospects for oilmeals export, especially soyameal, are bright during October-December. Worldwide there is a shortage of oilmeal since crop in the US and China is estimated to be 20 per cent lower,” said Mr Davish Jain, Chairman of the Central Organisation of Oil Industry and Trade (COOIT).

“In view of a higher oilseeds production, especially soyabean, we enjoy an advantage. Particularly, there is good demand from East Asia and we will be able to meet it,” he said.

According to the Solvent Extractors Association (SEA), oilmeals export slid to 14.32 lakh tonnes (lt) during the first half against 16.33 lt a year ago. Soyameal shipments were down to 7.75 lt (9.75 lt), rapemeal to 3.90 (4.51), groundnutmeal to 12,275 tonnes (48,100 tonnes) and ricebran extraction to 91,475 tonnes (94,750 tonnes). Exports of castorseed extraction, however, increased to 1.63 lt from 63,575 tonnes.

“We cannot compare the current fiscal’s figures with that of the last one. This year, we have had a lower oilseeds crop,” said Mr B.V. Mehta, Executive Director of SEA. “But exports will improve in the coming months as we are expecting a higher crop in oil year.”

During the current oil year (November 2006-October 2007), oilseeds production is estimated to have declined to 226.7 lt from 239.7 lt last year. In the oncoming year, production could top 250 lakh tonnes, according to the industry.

Kharif oilseeds output

According to COOIT, kharif oilseeds production is estimated to be 151 lt against 131.5 lt last year. “For soyameal, we have at least 10 lakh tonnes of export orders contracted for the new crop,” said Mr Jain.

To a question on 68 per cent drop in oilmeal exports to China during the first half, he said China would continue to buy, especially in view of a lower crop there. “The crop in China is lower. It will have to either import soyabean or meal. High freight charges will force it to buy soyameal from India,” Mr Jain said.

Freight charges for soyabean and meal from the US to China is over $100 a tonne, while from India the charges for shipping soyameal is $40-45. “India will definitely be preferred,” he said.

Mr Rajesh Agrawal, spokesman of Soyabean Processors Association of India, said China had contracted around 1.5 lt of soyameal and it was buying it in small containers.

Beside China, other countries which have contracted Indian soyameal are Japan, South Korea, Vietnam, Indonesia, the Philippines and Thailand, according to Mr Jain. “These destinations account for 7-8 lt of the contracted volume,” he said.

While oilmeal exports are set to gather pace, the unit value realisation is also higher compared to last year.

“New contracts have been struck around $300 a tonne free alongside ship against $220 last year,” said Mr Agrawal.

“Oilmeal exports realisation will be higher. Rapemeal is ruling at $162 against $107 last year, groundnut meal at $255 against $156 and castormeal at $100 against $50,” said Mr Mehta.

Mr Agrawal said while there was every possibility of soyabean production topping 90 lakh tonnes, farmers too were getting good prices. “Currently, bean prices are around Rs 15,500 a tonne against Rs 12,250 last year,” he said.

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