The Hindu Business Line : Soya prices hit record high on oilmeal demand

"All problems with regard to soyameal exports are over. During the last two weeks, we have got orders to export two lakh tonnes," said Mr Rajesh Agrawal, Chairman, Soyabean Processors Association of India.

The demand for soyameal has, in turn, led to a rush for soyabean, resulting in its prices flaring up. On Tuesday, soyabean was quoted at Rs 19,000 a tonne against Rs 18,000-18,100 last week. Soyabean growers have never seen such prices before.

In the global market, soyabean prices have hit a 15-1/2-year high of $10.575 a bushel (of 27.2 kg) (approximately Rs 17,450 a tonne) on concerns over the export pace of Brazil's soya crop as the Paranagua port shutdown due to transporters' strike looked set to continue. The transporters have a 31-point charter of demands to be met by the port authorities. But the authorities are not ready to meet all the demands.

"Bad weather in Brazil and Argentina have also resulted in the prices going up, as also the demand for Indian soyameal," Mr Agrawal said.

Last week, South Korea bought 50,000 tonnes of soyameal at $381 a tonne c&f (about Rs 17,150). "Currently, it is being quoted at around $390 c&f, while f.a.s (free alongside ship) rate is $343-345 a tonne," he said.

Soyameal exports had slowed down during January on outbreak of the avian influenza in Far-East and South-East Asian countries. "Now that the influenza is no more, demand for Indian soyameal is building up due to rising freight rates that make imports from South America a costly proposition. Moreover, crop in Brazil and Argentina has been hit due to bad weather," industry sources said.

The industry had initially estimated soyameal exports to top 30 lakh tonnes against 13.3 lakh tonnes last year. However, going by the current demand, exports could easily touch 35 lakh tonnes, according to industry sources.

Soyameal is used in compound feed for cattle and poultry. It makes up about 25 per cent of the feed.

Brazil's crop, though seen higher than last year's 52.5 million tonnes (mt), is estimated at 59.5 mt, lower than initial estimates that pegged it at over 60 mt. On the other hand, soyabean carryover stocks are seen less than 125 mt, the lowest since 1977.

"Even we are facing problems of bean supply. Arrivals are now down to a trickle," Mr Agrawal said.

The peak arrival season for soyabean in the country is October-December and currently, arrivals are only 5,000-6,000 tonnes a day.

"We may see arrivals increasing only after sowing. Farmers could hold back 6-7 lakh tonnes for sowing and there could be another 6-7 lakh tonnes with them" he said.

In view of the low arrivals, the crushing units were facing problems of capacity utilisation. "Only units that have stocks and are able to make purchases are operating," he said.

The situation is despite soyabean production topping 70 lakh tonnes, up from 44.5 lakh tonnes last year. This year, growers have not only seen a rise in production but also in prices.

This, according to Mr Agrawal, could result in huge rise in area under soyabean next season. "We could have more area and production during next season subject to weather conditions," he said.