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Brazil and Argentina will probably ship more soybean meal to Southeast Asia, as sales plunge from India, the largest regional supplier, Rabobank International said.
Exports from India are set to decline to 1.2 million tonnes in the year started October 1 and drop to negligible levels by 2020 as domestic demand surges and the harvest stagnates, according to Pawan Kumar, director, Food & Agribusiness Research & Advisory. That'll force countries to turn to Brazil, Argentina and the US for supplies, he said.
Poultry is a leading form of meat protein in Southeast Asia and demand is increasing as incomes rise, driving consumption of livestock feed such as soybean meal. The region's imports more than doubled in a decade to 13.7 million tonnes in 2013-2014 and will rise to about 20 million tonnes by 2019-2020, Kumar said. Production growth in the region is constrained by a lack of additional land and water, he said.
"India's crop is not enough to cater to both domestic and export markets," Kumar said in a phone interview on Tuesday. Indonesia will probably buy 4.7 million tonnes of soybean meal in 2015-2016 followed by Vietnam with 4.3 million tonnes and Thailand with 3 million tonnes, according to the US Department of Agriculture (USDA). Only the European Union imports more. Soybean meal futures on the Chicago Board of Trade plunged 40 per cent in the past year to $301.90 per 2,000 pounds. Prices fell to $296.30 on June 1, the lowest level since October. Shippers were offering the feed at $580 a ton at Kandla port in western India on June 2, the extractors association said.
Argentina is the biggest exporter of soybean meal and will probably ship 31 million tonnes in 2015-2016, according to the USDA. Brazil is the second largest with 14.5 million tons and the US ranks third with 10.7 million tonnes, the data show.
India is losing customers because supplies are more expensive than global rates as a result of the crop's non- genetically modified status and lower supply, Kumar said.
"Iran, or for that matter, Southeast Asia is not a region where the consumer is at a level where they would go for organic meat," he said. "They would all go for the cheapest meal." Exports from India are set to drop as much as 29 per cent to 1.5 million tonnes in 2014-2015 from 2.1 million tonnes a year earlier, the Soybean Processors Association of India said. That's the lowest since at least 1992-1993, group data show.
The soybean harvest will probably total 10 million tonnes to 12 million tonnes annually over the next five years, yielding about 7 million tonnes of feed, Kumar said.
Domestic demand for the feed has expanded by 12 per cent a year in the past decade and may jump to seven million tonnes in 2019-2020, he said.
