PUNE: Indian traders have cancelled some export contracts of soyabean, estimated at about 1 lakh tonnes, due to the appreciation in the rupee.
However, with Iran emerging as an unexpected buyer of Indian soyameal, the industry has been able to maintain a good pace of soyameal exports in the first quarter which began in October.
"Appreciation of the rupee took the edge out of soyameal export pricing, which led to cancellation of about one lakh tonnes of export contracts," said Davish Jain, president, Soyabean Processors Association of India (SOPA).
Several multinational companies had bought soyabean at the beginning of the season, expecting that China will import from India in the backdrop of its trade tensions with the US. Although China hasn’t yet opened its doors for Indian soyameal, demand from Iran has helped keep up the pace of exports.
According to Solvent Extractors Association (SEA), India has shipped about 2 lakh tonnes of soybean meal to Iran between April and November 2018 compared with 23,000 tonnes in the year-ago period.
In the domestic market, soyabean prices have mostly stayed below the minimum support price (MSP) since harvest began from mid-October, and have started moving upwards only after Diwali. Including bonus of Rs 200/quintal, the government has increased the MSP of soyabean by 11.5%— to Rs 3,399/quintal in 2018-19 from Rs 3050/quintal in 2017-18.
"Soyabean arrivals are ruling at about half their normal levels for this time of the year due to impact of drought in Maharashtra. Average soyabean prices are currently ruling at Rs 3,400/quintal," said Lalit Shah, chairman, Latur APMC. Prices have moved up by about 20% in the last one month.
While farmers are feeling helpless that prices have started rising after they sold their produce, the processors of soyabean are worried about not only the rising prices but also the skewed supplies.
"The flow of soyabean supplies has been disturbed since the long market holidays for Diwali. We are not getting supplies at the expected level. There has been a lot of stocking by the intermediaries," said Jain.
Meanwhile, a trade source told ET that the Chinese government this week asked the Indian government for a draft of protocol for Indian soybean meal, to be discussed during the GACC visit to India starting December 10.
According to SEA, prior to the ban in 2012, China used to import nearly half a million tonnes of oilmeals—rapeseed meal 3.5-4.0 lakh tonnes, and 1.0 lakh tonnes of soybean meal—from India.
Source: economictimes.indiatimes.com