After basmati and crude oil, it is soyameal that’s getting India closer to Iran.
The West Asian country has emerged as the largest buyer of soyameal from India in recent months displacing Japan from the top slot. Until now, Iran has been largely sourcing soyameal from Latin American countries such as Brazil and Argentina.
Soyameal is used for live stock feed in sectors such as poultry, piggery and fisheries.
In the April-July period, Iran imported 4.4 lakh tonnes of soya meal accounting for over half of the India’s exports of 8.25 lakh tonne for the period. This is according to the data collated by Soyabean Processors Association of India (SOPA).
“Iran’s buying has provided a fillip to our exports,” said Rajesh Agrawal, spokesperson for SOPA. “They (Iran) have come at a time when no other country is buying in such large quantities due to prevailing high prices”.
The recent bilateral payment mechanism that allows importers in Iran to make payments in Indian rupees is aiding the soyameal exports. Iran’s total requirement of soyameal is estimated to be between 1.2 and 1.5 million tonnes. “We are in a position to supply at least 40-50 per cent of their demand,” Agarwal said.
Soyameal prices have more than doubled in the past 10-12 months from the levels of around $280 a tonne to a high of $680. This price rally was triggered by the drought-reduced crop size in Brazil and Argentina last year.
Further, prices continue to rule high as the worst drought in 56 years faced by the US, the largest producer, has shrunk this year crop by 12 per cent. The contracts for the new season starting October have been settled at $610 a tonne.
“We have a good window till January-February next year, when the South American crop comes into the market. Also the firm domestic demand is expected to keep prices firm,” Agarwal said.
India exported 40 lakh tonnes of soyameal worth Rs 7,017 crore in 2011-12. Japan, which accounted for 30 per cent of the India’s exports last year, has been the largest buyer for the past five years. Vietnam, China, Korea, Myanmar and the Philippines are the other large buyers of India soyameal.