The Hindu Business Line : Demand helps soyabean, meal fetch record prices

Demand and supply
Soyabean in Indore were quoted at a record Rs 20,400 a tonne, almost mirroring 2004, when soyabean production was high as also the prices.
This year, the production is pegged at a record 94.5 lakh tonnes.
Shipped 13-14 lakh tonnes, while 25 lt have been contracted for exports.

M.R. Subramani

Chennai, Jan. 1 A lower US soyabean production, uncertainty over weather in South America and higher freight rates are propelling oilmeal, particulary soyameal, exports from the country. Things have just not stopped with rise in exports but the shipments are fetching record prices.

“Soyameal is currently fetching $410 a tonne f.o.b (free on-board) because of various factors, including higher bean prices. People are especially watching the weather in Brazil and Argentina, where soyabean crop is projected at 60 million tonnes and 47 million tonnes respectively. Speculation is that there might be a shortfall,” said Mr Rajesh Agrawal, spokesperson of the Soyabean Processors Association of India.

“Not just soyameal but all oilmeals are fetching 80-100 per cent higher prices than last year. This is mainly because we enjoy an advantage shipping to the Far-East countries,” said Mr B.V. Mehta, Executive Director, Solvent Extractors Association of India.

During the same time a year ago, soyameal prices were quoted around $210 a tonne.

Exports

“Going by the current trend, we will be exporting around 50 lakh tonnes of oilmeals, the same as last year. But realisations will be almost double at $6,000 crore,” said Mr Mehta. “No doubt, we are paying higher beans for oil but then better prices for meal is helping us to a great extent,” he said.

Mr Agrawal said domestic bean prices were ruling at a record high.

Production

On Tuesday, soyabean in Indore were quoted at a record Rs 20,400 a tonne. In fact, it is a situation almost mirroring 2004, when soyabean production was high as also the prices. This year, soyabean production is pegged at a record 94.5 lakh tonnes and growers are reaping the benefit of global shortage.

“We have shipped 13-14 lakh tonnes (lt), while 25 lt have been contracted for exports,” Mr Agrawal said.

“We should be exporting 35 lt of soyameal, 9-10 lt of rapeseed meal, 2 lt of groundnutmeal, 2.5-3 lt of castormeal and 2.5-3 lt of ricebran extraction,” Mr Mehta said.

Shipments

“We enjoy a logistical advantage in the Far-East nations compared with Brazil and Argentina. Freight rates to that region are around $40-60 a tonne, while for the Latin American countries it is around $100-120,” he said.

Freight advantages

“Exports are being done in bulk and containers, including to China. The only problem we are facing is shortage of rail wagons. It even slowed down crushing a week ago,” Mr Agrawal said. “We are also doing exports on and off to Pakistan,” he said.

“Our exporters are shipping in containers at a cheaper freight price, even lower than bulk freight. Exports in containers make up nearly 20 per cent of total oilmeal shipments,” Mr Mehta said.

Overseas Delegation

Encouraged by the current export trend, the Solvent Exporters Association is planning to send a delegation to Cambodia and other Far-Eastern nation to further strengthen the hold on the markets there.

“Cambodia promises a lot since it is a growing market. A trade delegation from here will visit that country in March or April,” he said.

On the other hand, thanks to trade delegations’ efforts – two visits in the last five years – China has turned into a reliable market, according to Mr Mehta.

On the other hand, domestic offtake of oilmeals is also increasing. “Soyameal from Maharashtra is meeting the demand in the South, while the meal from Rajasthan is used for catering to the North,” Mr Agrawal said.

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