Agri Business

Soyameal freight costs up 10% on railway reclassification

T.E. Raja Simhan Chennai | Updated on February 02, 2011 Published on January 31, 2011


Freight cost for transporting soya products from a factory to the port of despatch has increased by 10-15 per cent due to the recent reclassification of de-oiled cakes to Class 120 from 110 by the railways, according to an industry official.

“This is totally unwarranted. There is no jurisdiction to raise the classification. We cannot pass on the additional cost to our clients,” said Dr Davish Jain, Managing Director, Prestige Foods Ltd, a Rs 500-crore Indore-based group. “We in the industry were not consulted at all on the issue. We will become uncompetitive in the international market even as China is giving us stiff competition,” he told Business Line recently.

The major concern for the industry is infrastructure and scientific and safe storage of food grain, cold storage chain and network of marketing yards.

Globally, with a production of 238 million tonnes, India's share in global soyabean production was 3.8 per cent in 2009-10 and expected to marginally increase to four per cent during the current fiscal. The estimated soybean crop size this fiscal is going to be 10 million tonnes against 9.7 million tonnes last year. Exportable surplus for soyabean meal for this fiscal to be around 4.5 million tonnes after meeting the domestic demand for food and feed, he said.

Dr Jain said China dominates the global soybean industry with a 55 per cent market share. “China scores over other countries on its infrastructure for all the industries,” he said.

Prestige, one of the largest soybean processors and into ‘food grade soya', exports products worth nearly Rs 100 crore to various countries, he said.

Expansion

On Presige's expansion plans, Dr Jain said, the company is investing nearly Rs 15 crore to double the soya processing capacity at Dewas in Madhya Pradesh to 1,20,000 tonnes. The expansion includes adding one more plant at Dewas, he said.

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Published on January 31, 2011
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