Bloomberg News

Soybean-Meal Exports From India to Climb 25% on Bigger Crop

September 24, 2011

(Updates with executive’s comments in fourth paragraph.)

Sept. 24 (Bloomberg) -- Soybean-meal exports from India, Asia’s largest supplier of animal feed, may climb 25 percent next year as domestic oilseed output surges to a record, according to Adani Wilmar Ltd., a processor and exporter.

Shipments may jump to 5 million metric tons in the year beginning Nov. 1, from an estimated 4 million tons this year, Atul Chaturvedi, chief executive officer, told reporters in Mumbai today. Traders likely sold 250,000 tons to 300,000 tons of soybean meal from the new crop, less than the 700,000 tons contracted to export a year earlier, he said.

Increased supplies from India may accelerate a 12 percent decline in soybean-meal prices this year in Chicago and boost sales at processors including Ruchi Soya Industries Ltd., Adani Enterprises Ltd. and KS Oils Ltd. The December-delivery soybean meal contract fell 1.5 percent to $330.10 a short ton on the Chicago Board of Trade yesterday.

Prices may “remain under pressure” in the next few months as buyers wait for a further decline in rates, Chaturvedi said. India’s exports will gain next year as “Japanese demand is robust and exports to Europe and Japan will be better than last year,” he said.

India competes with the U.S., Argentina and Brazil to supply animal feed to China, Vietnam, Japan and South Korea. Soybean meal, India’s largest meal export, is added to poultry feed as a form of protein to aid birds’ growth. The country usually exports more than 70 percent of its output.

Normal Monsoon

Soybean production may exceed 11 million tons in 2011-2012 after above-normal monsoon rainfall helped farmers to increase area under the oilseed, Chaturvedi said.

Farmers planted soybeans in 10.32 million hectares (25.5 million acres) as of Sept. 16, compared with 9.32 million hectares a year earlier, according to data from the farm ministry. The monsoon, the main source of irrigation for the nation’s 235 million farmers, has been 4 percent above a 50 year average, according to the India Meteorological Department.

Crude palm oil imports by India have “dried up” since Sept. 15 after Indonesia announced a cut in tax on exports of refined palm oil products, Chaturvedi said. Refiners have halted purchase of unprocessed palm oil as they fear a flood of imports of refined oil, he said.

“Indian refiners would not sign their own death warrants by signing import contracts now,” he said.

Indonesia will levy a maximum tax of 10 percent on refined, bleached and deodorized palm oil from Oct. 1, while crude palm oil will be taxed at a maximum of 22.5 percent, according to a Finance Ministry Decree signed Aug. 15.

‘Depressed’

Palm oil prices will remain “depressed” as Indonesia’s efforts to boost refined oil reduces demand for supplies from Malaysia, the second-biggest supplier, LMC International Ltd. Chairman James Fry told an industry conference in Mumbai today.

Prices in Malaysia may drop to as low as 2,525 ringgit ($794) a ton by March if the Brent crude oil price drops to $87 a barrel, he said. Palm oil futures, which have lost 21 percent this year, closed at 2,992 ringgit in Kuala Lumpur on Sept. 23. Brent for November delivery fell 1.4 percent to $103.97 a barrel on the London-based ICE Futures Europe exchange yesterday.

Edible-oil imports by India may increase to 8.5 million tons to 8.8 million tons in the year beginning Nov. 1 from an estimated 8.3 million tons this year, Chaturvedi said.

--Editors: Thomas Kutty Abraham, Jake Lloyd-Smith

To contact the reporter on this story: Swansy Afonso in Mumbai at safonso2@bloomberg.net

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net


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