Beijing scraps 5 per cent customs levy on Indian imports

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may lift exports to China to around 10 lakh tonnes

India could

emerge as the top exporter of soyameal to China

Already, around

7 lakh tonnes have been contracted for shipments

Deals have

been struck at $225-236 a tonne c&f

Chennai, Sept. 22

China's move to scrap a five per cent customs duty on soyameal imports from India is expected to give further impetus to the oilmeal's exports from the country.

"It will give a distinct advantage to India and soyameal exports are likely to surge," said Mr Davish Jain, Chairman, Central Organisation of Oil Industry and Trade and Managing Director, Prestige Foods Ltd.

Oilseeds output

Though oilseeds production during the current kharif season is expected to decline by 38 lakh tonnes to 130 lakh tonnes, soyabean production is expected to be around previous year's level of 70 lakh tonnes. The Centre, however, has pegged the production at 75.5 lakh tonnes against 83.5 lakh tonnes previous year.

"Last year, Indian imports made up seven lakh tonnes of the eight lakh tonnes of soyameal imported by China," he said. China annually imported 30 million tonnes of soyabean and produced 17 million tonnes of soyameal.

13% VAT

China imposed a 13 per cent value-added tax besides the five per cent customs duty on soyameal imports. "The scrapping of the import duty on soyameal from India will put us on par with the Chinese solvent extractors," Mr Jain said. "It could even help us to increase our exports to China to around 10 lakh tonnes," he said.

Interestingly, Prestige Feed Mills have begun direct exports of soyameal to China.

A shortfall of 1.5 million tonnes of soyameal was likely to be felt in China and it would offer a good opportunity for India, he said, adding that New Delhi could emerge as the top exporter of soyameal to China.

1,750% jump in imports

According to Chinese data, soyameal imports from India have jumped by over 1,750 per cent during January-July to 6.23 lakh tonnes.

The solvent extraction industry expects soyameal exports to be around 40 lakh tonnes, the same as previous year, though Mr Jain said the situation last year was "extra-ordinary".


"Last year, domestic consumption fell by 10 lakh tonnes as demand from the poultry sector fell due to the effect of avian influenza," he said. "This year, we are expecting domestic demand to pick up and we could get about 55 lakh tonnes of soyameal for meeting export and domestic demand," he said.

Soyameal exports are looking buoyant and already around seven lakh tonnes have been contracted for shipments to far eastern and South-East Asian countries such as China, Japan, South Korea and Taiwan. The contracts are from the new crop that is set to hit the market by the month-end. The deals have been struck at $225-236 a tonne c&f.

India convenient

"Chinese feedmills have a convenience in buying Indian soyameal as it can be offered in small parcels. Another advantage is that only India offers soyameal in containers. No one else offers such a facility," Mr Jain said.

The problem areas for soyameal exports could be that domestic prices could rise on lower oilseed crop, especially groundnut, which is estimated to be lower by 10 lakh tonnes. However, lower freight charges could compensate for that.

According to reports, the scrapping of the Chinese duty is part of the agreement under the Asia Pacific Treaty, which covers 1,717 commodities from fish to textile products between China and countries, including South Korea and India.

(This article was published in the Business Line print edition dated September 23, 2006)
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