Thanks to China’s trade war with the US, India is expected to restart rapeseed meal export to its neighbour.
China had been importing 4-5 lakh tonnes of the material till 2012, when it banned Indian shipments over issues of contamination. Rapeseed meal is used as feed for poultry and livestock.
BV Mehta, Executive Director of the Solvent Extractors Association of India, said the Commerce Ministry had organised a video-link with Chinese officials last week to explain to them that their fear of contamination in rapeseed meal is unfounded as all pests are destroyed when rapeseed meal is processed at extreme heat.
Industry officials from India were also involved during the meeting to reconnect with traders there, and to outline the process involved in making the meal in India, Mehta added.
After banning Indian oil meal imports in 2012, China had increased its shipments from the US. However, following the recent tariff war, shipments from the US have become costlier after Beijing levied a 25 per cent import duty on the commodity in retaliation for US tariffs, he said.
China had imported from India oil meal worth $161 million before its tests showed that some cargoes were contaminated with malachite green, a dye widely used in India to brand grain sacks.
In the first four months of this fiscal, India’s rapeseed meal export more than doubled to 3.69 lakh tonnes (1.65 lakh tonnes) due to strong global demand in South Korea, Vietnam and Thailand.
The country has a huge inventory of rapeseed, which can be crushed to make meals, and exported to China. In fact, government agency Nafed, the nodal agency for executing the minimum support price (MSP), itself has inventory of about 8 lakh tonnes, said Mehta.
Though the Indian rapeseed meal is sold at a discounted price of $217 a tonne, compared to $283 a tonne for shipments from Europe, the weak rupee will boost realisation, he added.