Mad cow fuels feed demand, soyabean trade celebrates

Export demand of soyameal has risen sharply. Big shipments were headed for United States for use as cattle feed after USA banned use of bone powder as cattle feed to prevent spread of BSE, better known as the mad cow disease.

In fact, US has banned use of all animal material like bone meals, nerve tissue and spinal cord matter for use as protein in animal feeds.

US feed makers were still permitted to use animal matter from one species (like cows) to make feed for another species (like lambs).

But animal ranchers producing meat were moving towards vegetable-based protein supplements rather than animal proteins in livestock feed as consumers wanted it that way.

Farmers producing milk, instead of beef, were also preferring vegetable protein feed instead of animal protein feed. There was no indication animal protein-borne infections were transmitted through milk.

A feed exporter based in Kolkata said demand for US meat products would revive only after consumers were convinced that animals were being fed vegetable feed and not animal proteins. This provided an excellent opportunity for Indian vegetable feed exporters.

Indian expeller plants and exporters were finding it difficult to cope with demand. According to sources in Soyabean Processors Association of India (SOPA), export orders at least 20 lakh tonnes of soyameal have been received for feed use.

Soya expeller plants were buying up soyabean arriving at the 'mandis'. Traders said prices in April-June 2004 may rise to Rs 19000 per tonne against last year's Rs 17500 per tonne.

Prices of soyabean have continued to be high despite arrival of more than 60 per cent of the crop at markets in Madhya Pradesh.

Traders said 40 lakh tonnes out of the total yield of 70 lakh tonnes have been sold and the balance crop of 30 lakh tonnes was expected to be sold in the next few months.

Prices would rise further as the next crop could be expected only after nine months.

Soya expeller plant delivery rates were also ruling high at Rs. 16150-16250 per tonne, equivalent to peak prices witnessed in April-June 2003. Arrival volumes at mandis has dropped from 1.5-1.75 lakh sacks daily to 1 lakh sacks daily now.

The yield of soyabean is expected to be at all-time high of around 70 lakh tonnes against the official estimate of 68.5 lakh tonnes made by Central Organisation for Oil Industry and Trade (COOIT).

The selling price of soyabean was around Rs. 12000-12500 per tonne at the time of commencement of arrivals in September 2003. Prices have since risen beyond Rs 15500 per tonne in December 2003, the highest in eight months.

During October 2003, arrival of soyabean in markets in Madhya Pradesh was 5 lakh sacks per day. The bull run on futures markets like Chicago Board of Trade and Kuala Lumpur Commodity Exchange as well as the futures market of National Board Of Trade (NBOT) at Indore have indicated that that price of soy oil would be above the level of Rs 458 per 10kg in January 2004 and Rs 460 in February 2004.

Some of the soyabean crop was being held by richer farmers in the hope of further rise in prices. In response, traders were concentrating on export of soyameal.

Asian markets were short of the material as well as export of soyameal from China has dropped. Indian soyameal was being exported to South Korea and Japan.

The export opportunity would last till March 2004. Thereafter; the soyabean crop from South American countries would arrive in western markets.