Soymeal exports likely to touch record levels

The country, Asia's biggest supplier of soymeal, is on track for record exports of the animal feed this year after selling 2.5 million tonnes since October, a spokesman for the soybean-processing industry said.

The sales amount to more than half of the targeted exports of 4.5 million tonnes for the year through September 2008, as buyers including China seek supplies amid a global shortage, Rajesh Agrawal of the Soybean Processors Association of India, said in an interview. Traders will ship the product by February, he said.

India competes with Brazil and Argentina for soymeal sales to countries including China, Vietnam, Indonesia and South Korea. Exporters are benefiting from prices, which gained 71 per cent in Chicago in the past year after US farmers planted the smallest acreage to soybeans in 12 years. 
 

WELL-PLACED Soymeal exports (in million tonnes)
Year	Quantity
2001-2002	2.80
2002-2003	1.49
2003-2004	2.64
2004-2005	1.97
2005-2006	3.50
2006-2007	4.20
2007-2008	0.93
Note: Figures for the year 2007-2008 are up to October 2007 Source: Soybean Processors Association of India

"Indian soymeal continues to be in great demand from buyers in China, Europe and Southeast Asia,'' Agrawal said.

The country raised its export target from 4 million tonnes estimated in September after the domestic soybean crop forecast was raised to 9.45 million tonne from 8.87 million, Agrawal said. Soybeans are crushed into soymeal for animal feed and into soybean oil for cooking and alternative fuel.

Soybeans yesterday extended a rally to the highest since 1973 on speculation that US demand for fuel made from grain and oilseeds will surge.

The Senate passed a bill December 13 that may boost use of alternative fuels such as ethanol and biodiesel.

Soymeal for January delivery fell 0.6 per cent to $322.90 a short tonne in after-hours electronic trading on the Chicago Board of Trade at 12:57 pm Mumbai time.

Indian soymeal prices have almost doubled to around $400 a tonne, excluding freight costs, from a year earlier.

European traders have contracted to buy as much as 100,000 tonnes of Indian soymeal and Chinese firms are seeking more from India to take advantage of lower freight rates, Agrawal said.

The Baltic Dry Index, a measure of commodity-shipping costs, has more than doubled in the past year.

"Indian suppliers have an edge over their rivals in South America because of the freight differential,'' Atul Chaturvedi, president at Adani Enterprises, a soybean meal exporter, said. "Freight rates may ease a bit from now on.''

India may ship as much as 500,000 tonnes of soymeal to China in the year to September, compared with 132,000 tonnes last year, Agrawal said on October 11.

Soymeal, the country'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 per cent of its output.