The Hindu Business Line : Soyameal price rises on pick-up in demand

"Pick-up in demand for soyameal has resulted in prices rising by $20-25 a tonne last week," said Mr B.V. Mehta, Executive Director, Solvent Extractors Association of India.

However, prices have tended to slip a bit at the beginning of this week.

According to Mr Rajesh Agrawal, Chairman, the soyameal market is tight with sales committed up to March. "Even soyabean supply is tight and prices are rising," he said.

The last export deal was 50,000 tonnes to South Korea at $240.80 a tonne c&f. "No new deal has been struck in the past week but current prices are $210 f.o.b," Mr Agrawal said. Current quotes of $208-210 are against $183-185 during the same time a month ago.

On NCDEX, soyameal has begun to reflect the tight situation. Prices for February delivery have pared gains to Rs 8,784 a tonne from over Rs 9,000 last week.

However, prices during the last week of December ruled at Rs 7,900 a tonne. For March, the rates are Rs 8,800, down from Rs 9,550 at the beginning of this month. During December last week, the prices were Rs 7,700.

"It is a good sign that prices are rising for oilmeals, especially soyameal and rapemeal. This will help improve bean prices and in turn, the farmers," Mr Mehta said.

Soyabean prices in Indore were quoted at around Rs 12,000 a tonne this week against Rs 11,700-11,800 last week and Rs 11,300 a month ago.

Arrivals, according to Mr Agrawal, are around one lakh bags of 90-kg and this is usual around this time of the year. "I think farmers could be having another two lakh tonnes of seeds with them," he said.

Mr Mehta said 4.75 lakh tonnes of soyameal were exported in December alone.

Mr Agrawal said at least 20 lakh tonnes of soyameal had been contracted for export since the beginning of the season. At least 75-80 per cent of the exports have been to Far-East destinations such as Taiwan, China, Japan, Indonesia, South Korea, Vietnam and the Philippines.

Most of the exports comprised small lots of less than 5,000 tonnes. As most of the compounds feed manufacturers prefer hand-to-mouth existence, especially due to the bird flu scare, exports of small lots by India have come in handy for them.

Compound feed manufacturers are main consumers of oilmeals, which makes up 30 per cent of the animal feed. "If people buy meal from Argentina or any other South American country, they will have to buy bigger volumes since the minimum quantity they ship is 40,000 tonnes," an industry source said.

"In the case of India, these small purchases will help the importer buy three or four types of meal. For example, the importer can buy 5,000 tonnes of soyameal, 2,000 tonnes of rapemeal and 1,000 tonnes of castormeal," Mr Mehta said. Yet another reason why Far-East nations are turning to India is the delivery time. "It takes about 10 days for delivery, whereas consignments from South America or the US take over 45 days," Mr Mehta said.