Soymeal prices dip as bird flu takes toll

Rates could decline Rs 100-200.

Domestic soymeal prices will witness a decline of Rs 100-200 per tonne in the next few weeks owing to a drop in orders from the poultry industry because of the bird flu scare, traders said on Wednesday. India consumes around 2-2.1 million tonne of soymeal annually, mainly as feed for poultry.

"In the next 2-3 weeks, local prices of soymeal might soften as poultry traders could stop meal purchases due to slowdown in chicken consumption," Rajesh Agarwal, chairman, Soybean Processors Association of India, said.

He expects prices to recover as soon as Maharashtra stops large scale culling of chickens and the government comes out with a clarification on the damage caused by bird flu.

"We feel local soymeal prices might drop down to Rs 8,000-8,200 per tonne (ex-factory) in the local markets as more and more poultry owners stop meal purchases," another soymeal exporter from main soybean hub, Indore, said.

On Wednesday, meal prices in the local markets were around Rs 8,400-8,500 per tonne.

"It is the daily sellers of soymeal who are bearing the brunt of bird flu, as their sales have declined from small and medium poultry farms after bird flu hit the country on Sunday," another local meal trader said.

Soymeal is the main feed for poultry because of its nutrient value. Most traders feel increased exports would make up for the current slump in domestic soymeal consumption.

"Exports are continuing in normal pace and no shipments have been cancelled because in most South-East Asian nations the bird flu scare is already over," a senior official of ITC's international marketing division, said.

He saw "meal export rate to stay around Rs 9,000-9,100 per tonne on ports because of normal exports".

"Good exports would make up for the hit that soymeal producers will take due to postpone of orders in local markets," Rajesh Agarwal of industry body SOPA said.

Export were around 2.7 million tonne in 2005-06 (November-October) oil year due to good demand from South-East Asian nations.

Poultry industry players have been badly affected by the sharp drop in chicken rates across India, following the bird flu scare.

"As per our estimate, chicken consumption has gone down by around 30-40 per cent across the country after the bird flu scare," a senior official of Coimbatore-based Pioneer Hatcheries said.

He said in Tamil Nadu prices have slumped by around Rs 18-20 per kg to Rs 21-20. "Moreover, many state administrations are banning purchase of soymeal from Maharashtra after bird flu, which does not justify any logic as soymeal is purely an agricultural produce," another poultry trader said. The poultry industry roughly employs around 3 million people and is growing at a rate of 17 per cent per annum.