Oilmeal exports dip as prices remain firm in India

According to data provided by the SEA, oilmeal exports have fallen 51% to 199,168 tonnes in April this year from 403,090 tonnes in April 2012

A sharp fall in oilmeal exports from India is expected to hurt not only traders but also hamper the profitability of crushing mills in the country. According to data provided by the Solvent Extractors’ Association of India (SEA), oilmeal exports have fallen 51 per cent to 199,168 tonnes in April this year from 403,090 tonnes in April 2012.

According to the industry body, the sharp fall was mainly due to disparity in crushing and high prices of soybean, which resulted in less availability for export.

Oilmeal exports fell to 4.84 million tonnes (mt) against 5.6 mt in the previous year, a decline of 15 per cent.

“India’s soymeal prices have been higher by over $100 a tonne than in the international market. This hampered overseas demand. Further, the domestic market is not big enough to compensate the export demand,” said Raju Choksi, vice-president (agro-commodities), Anil Nutrients Ltd.

In the domestic market, prices have surged to Rs 35,000 a tonne on ex-Indore basis in April as against Rs 29,000 a tonne in early February.

Choksi said the surge was artificial. “Most crushing mills are closed due to high prices and non-availability of seed. Farmers and traders are holding on to their stocks of soybean in anticipation of a further rise in prices. This is an artificial rally,” he said.

South Korea, Vietnam, Japan, Indonesia and Iran, have significantly cut their oilmeal imports due to the price factor. However, Iran, which faces an international trade embargo, will continue to buy large quantities from India.

Insiders maintained such a situation would hurt crushing units badly as fresh crop arrivals will not start before June. “Prices will remain high till the next crop arrives in the market,” said market sources.

Most of the crushing mills are located in parts of Madhya Pradesh, Maharashtra, Rajasthan and Gujarat.