Indian oilmeal exporters concerned about Iran

Iran has emerged as the largest buyer of Indian oilmeal, the commodity used largely as bird and animal feed

Indian exporters exporting oilmeal, used largely as bird and animal feed, have expressed concerns about doing business with Iran, their largest market, after US President Barack Obama reiterated the official American stance of continuing hostilities with the West Asian country.

Last week, Obama declared that the US was still prepared to act militarily to stop Iran from developing nuclear weapons, despite the decision to pursue a diplomatic deal.

“We have to be careful as far as oilmeal exports to Iran go. We would have to look for alternative markets for future growth,” said Dinesh Shahra, managing director of Ruchi Soya Industries Ltd, the largest oilmeal exporter in India.

Iran, which recently started oilmeal imports from India, has emerged as the largest buyer of Indian oilmeal. Currently, Iran imports over 30 per cent of India’s overall oilmeal exports.

Data compiled by the apex trade body, the Solvent Extractors’ Association showed Iran’s import at 472,361 tonnes of oilmeal between April – August 2013, an increase of 3.55 per cent from 456,133 tonnes in the corresponding period last year. Total oilmeal exports stood at 1,335,695 tonnes in the first five months of the current financial year compared to 1,482,517 tonnes in the same period last year, witnessing a decline of 10 per cent.

 

The best advantage Indian exporters enjoy is rupee denominated trade with Iran which may not be possible for new or existing markets elsewhere.

 

“We will not be utilizing all our rupee debit with Iran as oilmeal exports is minuscule in comparison with crude oil imports from there,” said an exporter.

 

Last week, President Barak Obama declared that the United States is still prepared to act militarily to stop Iran from developing nuclear weapons despite the decision to pursue a diplomatic deal and not strike Syria over its alleged use of chemical weapons.

 

Meanwhile, Indian exporters have contracted for around half of annual oilmeal exports to take the advantage of rupee depreciation. “We have already signed contacts for 600,000 tonnes of oilmeal to be extracted from new season crop which is set to be harvested in a month.

 

According to Shahra, India’s oilmeal exports may hit this year at 4.2 million tonnes, around same as last year.

 

India is exploring new markets in South East Asia and the Middle East for oilmeal exports.