Soymeal Prices Down 50% On Poor Demand

The domestic oilseeds processing and crushing industry is facing rough weather. Due to the glut in soymeal in the international market and lesser demand from the far-eastern countries, meal prices have suffered a severe setback in the last six months by over 50 per cent.

Soymeal prices at present have dropped to $145 a tonne from $320 a tonne and rapeseed meal has slid to $60 a tonne from $120 a tonne last year.

Domestic oil prices have gone up substantially in the last three to four months owing to increase in the international prices of edibles coupled with lower rabi oilseeds crop in India and rising demand for oils. Edible oil prices are rising over the world in the last six months due to lower production of oil and rising demand.

Industry sources said that the solvent extraction industry is passing through a rough patch due to acute shortage of raw materials (oilseeds), the depressed international market for oilmeals which lead to the drastic fall in export earnings in the current year and also the shortfall in the commerce ministry's export target of $900 million.

The Solvent Extractors' Association of India (SEA) urged the prime minister, the union finance minister, and the minister for food and civil supplies, to allow import of high oil content oilseed like sunflowerseed and rapeseed, oil bearing materials like ricebran and oilcakes to overcome raw materials shortage and to augment supply of edible oils.

Ajay Tandon, president of SEA, said that the country has huge unutilised capacity to process this material and thereby make available the oil to consumers at a reasonable price.

Imports will provide a level-playing field to the domestic industry and oilseed import will not hurt the growers as the same will only partly replace the vegetable oil imports.

This will also augment the availability of oils and stabilise the edible oil prices in the country.

He said the solvent extraction industry, consisting of 600 solvent extraction plants, have an overall processing capacity of 30 million tonne. But hardly 33 per cent of this has been utilised.

Industry recovers over 1.5 million tonne of vegetable oils and produces over 11 million tonne of oilmeals per annum. He added that the industry is exporting over 4.3 million tonne of oilmeals, earning foreign exchange equivalent to over Rs 3,000 crore per annum.

Tandon said that the government should not be tempted to reduce import duty which would be counter productive in the long run and would discourage the farmers to grow more oilseeds in the country.

If both oils and oilseeds are freely importable, then the foreign exporters of oils would not be in a position to dominate the situation and jack up prices.

He also demanded import of crude oil over refined vegetable oils by imposing higher import duty on refined oils.