The Hindu Business Line : Oilmeal exports gain on logistical advantage

Chennai, June 10 Logistical advantage and availability of consignments in smaller lots that can be shipped in containers are reasons behind the 66 per cent increase in oilmeal exports from the country. In the first two months of the current fiscal, oilmeal exports have increased to 11.11 lakh tonnes (lt) against 6.71 lt during the same period a year ago.

While oilmeal shipments increased 46 per cent in April, they doubled during May on demand from the South-East and Far-Eastern countries such as Japan, South Korea, Vietnam and Thailand.

“Exports of oilmeals have not just increased volume-wise. They are fetching a higher value compared with last year,” said Mr B.V. Mehta, Executive Director of the Solvent Extractos Association of India. For example, soyameal exports are currently fetching Rs 19,000 a tonne free-on-rails against Rs 10,781 last year. (See Table)

“This year exports are commanding better prices due to lower crop in the US, where six million hectares under soyabean have been shifted to corn for producing fuel,” he said.

In view of higher soyabean prices, soya oil and meal prices too have increased. “But most importantly, farmers have gained from the higher prices. Besides, they are also gaining from last year’s record soyabean crop of 94.5 lt. Our oilseed crop this season (November 2007-October 2008) is also higher at 270-280 lt,” he said.

As bean, oils and oilmeal prices have increased sharply on supply shortage, origins with adequate stocks have gained. This has happened in the case of the Indian industry too.

Supply sizing

“It is not just the advantage of being closer to the South-East and Far-East that has worked to our advantage. We are also able to supply in smaller lots of 5,000 and 10,000 tonnes. In the case of origins such as the US or Argentina, they have to buy at least 50,000 tonnes,” Mr Mehta said.

The smaller lots mean a ship can have a mix of oilmeals — such as soyameal, rapemeal, rice bran extraction and groundnut meal.

“We also have been able to export oilmeals in containers. Shipments through containers are working out to be cheaper than bulk ones. For example, if bulk shipment freight charges are $60 a tonne, we are able to ship through containers at $50 a tonne. Generally, shipment through containers costs higher,” he said.

Container shipments

Import of products through containers is standing in good stead as shipping agents are able to offer these containers for oilmeal exports at a cheaper price. This is since they prefer to earn something while sending back the containers instead of returning them empty.“The ‘shipments through container’ ensures door-to-door delivery, particularly in the case of destinations such as Thailand,” Mr Mehta said.

Besides this, continuous efforts of the solvent extraction industry to undertake visits to importing countries have helped in sustaining exports. “When we first took a delegation to Vietnam, we were hardly exporting 50,000 tonnes of oilmeals. Since then, our exports have gained and today, it imports about 30 per cent of our total oilmeal exports,” Mr Mehta said.

Next destination

The industry sees Cambodia as the next destination with great potential, with the region witnessing 12-15 per cent growth in gross domestic product.“Vietnam is importing rice bran extraction besides soyameal. The extraction serves as a filler or low-priced and low protein feed ingredient,” he said.

Again, South Korea imports nearly 10 lt of rapemeal for use as pig feed.

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