India makes rare purchases of soymeal from China, Ukraine

[MUMBAI] Indian buyers have contracted to import 7,000 tonnes of non-genetically modified soymeal at around US$350 per tonne for the first time in years after prices in the local market spiked due to sharply lower soybean production, dealers told Reuters.

The imports would put pressure on local soymeal and soybean prices. "The poultry industry has contracted Chinese soymeal since it is cheaper than local supplies," said Davish Jain, chairman of the Soybean Processors Association of India.

Traditionally India exports soymeal to Thailand, Vietnam, Japan and Iran, but this year it has been struggling to export due to higher soybean prices. "I have seen a purchase of 3,000 tonnes from the Black Sea region, probably from Ukraine, which was bought at around US$350 a tonne on cost-and-freight (C&F) basis," said a Hamburg trader. "The imports are being made as a move to put downward pressure on Indian domestic prices to show the market there are alternatives if prices are too high and to push inventory holders into selling." Imports of genetically modified soymeal is not allowed in the south Asian country.

Soymeal prices in local market have jumped 16 per cent in two months to 34,500 rupees (US$528.41) per tonne as the country's soybean production in 2015 is expected to drop 15.3 per cent from a year ago to 7.2 million tonnes.

For October and November shipments 7,000 tonnes have been booked and more deals are possible if the wide spread between local and overseas prices remain, said a Mumbai-based dealer.

India had exported 1.05 million tonnes soymeal in 2014/15 season ended Sept 30, down from 2.5 million tonnes a year ago. "If the government removes 16 per cent import duty, then we can see much more imports," said Jain.

REUTERS