Bird flu incidents have minimum impact on domestic rates

M.R. Subramani

The soyameal scenario


Export prices

down $10/tonne

Fall in

local rates Rs 350 a tonne

Overseas demand

reduced to trickle as buyers have covered their positions

Chennai, March 3

While prices of eggs and chicken have fallen sharply on avian influenza affecting poultry birds in Nandurbar district in Maharashtra, the decline in rates of oilmeals has been marginal. Oilmeals, especially soya, groundnut and ricebran, are used as feed for poultry.

In fact, the prices have declined more due to weakness in the global market, according to industry players. Also, decline in export prices, especially of soyameal, has been more than the dip in its domestic price.

For example, on February 17, when reports of bird flu affecting birds in northern Maharashtra came in, soyameal was quoted at Rs 8,700-8,800 a tonne in Indore. Export prices were quoted at $207-209 f.o.b a tonne. On Friday, soyameal was quoted at Rs 8,350-8,450, while export prices ruled at $197-99.

On the other hand, groundnutmeal on Friday ruled at Rs 7,550 a tonne against Rs 7,650 on February 18. Fall in prices of other oilmeals such as sunflower, ricebran and rapeseed has been within 2 per cent only.

Export programme off

"Prices have declined for soyameal not due to reduction in consumption of poultry products. Most of the buyers abroad are covered and exporters, too, are not showing interest as the Centre has withdrawn its target plus programme that promotes shipments of specified products," said Mr Rajesh Agrawal, Chairman, Soyabean Processors Association of India. The target plus programme provided additional incentives in the form of duty-free licences against exports of products such as rice, wheat, gold and oilmeals.

According to Mr B.V. Mehta, Executive Director, Solvent Extractors Association of India, the fall in prices could be attributed more to sentiments.

"If people don't eat chicken, it doesn't mean the farmer will slaughter all the chicks. He has to feed them and keep them alive until demand picks up," he said.

Both Mr Agrawal and Mr Mehta said the bird flu was confined only to a small area in the country, where most of the parts remained unaffected.

"Whatever the impact on oilmeals, it will only be temporary," Mr Mehta said.

Soyameal shipments up

Meanwhile, soyameal exports up to February totalled 21 lakh tonnes for the season beginning November. According to the solvent extractors body, soyameal shipments between April and January were 21.25 lakh tonnes against 14.59 lakh tonnes the previous year. Overall, oilmeals exports were 29 lakh tonnes, up some eight lakh tonnes over the previous year.

Mr Agrawal said another 4-5 lakh tonnes of soyameal would be exported this month, while another 2-2.5 lakh tonnes could be exported in April.

"Fresh demand is trickling in small quantities. People are buying in containers to meet the needs," he said.

Oilmeal prices, especially soyameal, are expected to remain at the current level before rising in April as crushings tend to decline.

"Producers would not be able to offer at a price lower than this because there is no parity," he said.

Soyabean prices have, in fact, increased from Rs 1,180 a quintal when reports of bird flu broke out to Rs 1,200 currently. The prices have increased on fall in arrivals.

(This article was published in the Business Line print edition dated March 4, 2006)
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