A likely record soyabean crop in the backdrop of global soyabean supply tightness is expected to augur well for Ruchi Soya Industries Ltd.

The company is expected to turn in a 10-15 per cent growth in its sales for the year ending March 2013 mainly because of higher crushing of soyabean, increase in soyameal exports and better prices, said Dinesh Shahra, managing director, Ruchi Group of Industries.

For the year ending March 2012, the company’s net sales were at Rs 26,000 crore and net profit at Rs 125 crore.

Ruchi Soya is likely to crush 25 lakh tonnes of soyabean during the oil year starting October 1, 2012. In the current oil year, which ends on September 30, the company’s soyabean crushing will be 21 lakh tonnes.

Soyameal exports by the company are also seen higher at 17-18 lakh tonnes compared with 15 lakh tonnes this oil year, Shahra said on the sidelines of an oilseeds conference.

“Much of the crushing of soyabean will take place in the first half of the oil year,” Shahra said adding that this increase in demand will reflect in the company’s turnover during the current financial year.

India’s soybean crop

He expects the soyabean crop during 2012-13 (October-September) to be at a record 105-110 lakh tonnes. Harvest should commence by the end of this month and peak arrivals would be witnessed around mid-October.With a severe shortfall in global soyabean crop caused mainly by a sharp deficit in the leading soyabean producing countries of US, Brazil and Argentina, Indian crushers stand to benefit.

“We are sitting on low soyabean inventories,” he said adding that there is no replacement for protein.

Soyameal exports from India for the year starting October 2012 will be 50 lakh tonnes, up 5 lakh tonnes from 2011-12, Shahra said. Iran’s emergence as a buyer of soyameal should also help the industry and the company.

Edible oil imports

Edible oil imports are also likely to be higher because of a deficit groundnut and cottonseed output in the current planting season.

Shahra expects India to imports 103 lakh tonnes of edible oil during 2012-13 (November-October). For the year ending October 2012, the country is likely to end with imports of 98 lakh tonnes of edible oil. The incremental import of edible oil is likely to be palm oil as its prices are much lower than other competing oils, he said.

Palm oil

Palm oil supplies from Malaysia and Indonesia are quite high and estimated to be around 45 lakh tonnes.

“Palm oil needs consumers and India will be a major buyer of this commodity,” Shahra said. Palm oil prices are seen depressed and may go down below 2,500 ringgits atonne by the end of this year from the current level of 2,700 ringgits per tonne. But this price trend would mainly depend on the global soyabean output. “If the bean crop is in full swing and there are no adverse weather conditions prices could go down,” he said.

For the oil year ending October 2012, palm oil accounts for over 75 per cent of edible oil imports. Sunflower seed oil accounts for 12.5 lakh tonnes, soyoil 11 lakh tonnes and other oils 1 lakh tonnes. The rest of 98 lakh tonnes will be palm oil, he said. Good rainfall towards the end of the planting season in many of the mustard growing areas may lead to a higher output of mustard, he said.

He expects output of mustard, a rabi oilseed crop, to be around 60-65 lakh tonnes next year compared with 53.4 lakh tonnes in the current year.

Also, prices of mustard are much higher and may prompt farmers to bring in more land under cultivation.

(This article was published in the Business Line print edition dated September 23, 2012)
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