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Fallout of mad cow disease — Soyameal prices likely to rise in near term

M.R. Subramani

Chennai , Jan. 5

PRICES of soyameal are likely to rise in the near term on increased demand for exports in the wake of outbreak of the mad cow disease in the US.

However, the long-term effects of the disease, also known as bovine spongiform encephalopathy or brain-wasting disease, could impact soyameal consumption, industry experts feel.

Currently, the outbreak has made Far-East Asian countries turn to India for soyameal with a 15,000-tonne deal being struck with Japan at $310 a tonne c&f a couple of days ago.

"We will know the real effects of the disease on soyameal this week as markets in Far-East and South-East Asia have opened only today," said Mr Rajesh Agrawal, Chairman, Soyabean Processors Association of India.

Demand for soyameal from the country was good and adequate stocks were available. Also, soyabean supply was satisfactory, he said.

Anticipating renewed demand for soyameal, soyabean prices jumped to Rs 16,200 a tonne on Monday from Rs 15,700-15,900 tonne during the weekend. On the other hand, soyameal prices have increased to $260 a tonne f.o.b from around $252. In rupee terms, it is ruling at Rs 11,600-11,700.

"South-East Asia has not covered its demands for February and March. That's something to watch out for," Mr Agrawal said.

"The demand could be 5-7 lakh tonnes (totally) for these months," he said.

Already, contracts have been signed for exporting close to two lakh tonnes of soyameal.

The Solvent Extractors Association of India Secretary-General, Mr B.V. Mehta, said in the short term, demand for soyameal could go up if bovine/animal meal, made from animal waste, is banned by the US.

"If any decision is made to slaughter the animals, then there could be a rise in demand for soyameal in the short term. But we will also have to see the long-term effects," he said. "Right now, it is too early as it is hardly two weeks after the outbreak has been reported."

In 1989, when the disease broke out in the UK, millions of cattle were destroyed. As a result, there was a fall in demand for soyameal in the middle of 1990s.

"We will have to study the effects closely from all angles," Mr Mehta said.

The 1989 outbreak led to 137 deaths in the UK. The disease re-appeared in 2001 in Europe but it was brought under control quickly without much harm to human beings.

Mad cow disease is one of several fatal brain diseases. The infectious disease makes the brain full of holes, making it look like a sponge. The disease was once considered unlikely to infect other species, but some seem to move rather easily among animals.

Scientists believe people can get vCJD (variant Creutzfeldt-Jakob disease) from eating mad cows. It is similar to Creutzfeldt-Jakob disease (CJD), a brain illness that strikes about one person per million per year, due to genetic or unknown causes. The newer variety of CJD usually kills a person in about 18 months after symptoms appear, compared to 4-6 months for regular CJD.

The Solvent Extractors Association estimates oilmeal exports to be around 35 lakh tonnes this fiscal as against 18.9 lakh tonnes last year. Of this, soyameal exports are expected to be around 25 lakh tonnes.

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