India Expected to Experience Increase in Soymeal Exports Amid Global Price Surge
Published on: November 9, 2023.
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India’s soymeal exports are poised to increase in the upcoming months due to concerns over soybean output in Brazil, the world’s top producer. This has led to a rise in global prices, prompting buyers to turn to India for their soymeal needs. The boost in exports is expected to have a positive impact on soybean crushing in India, which in turn will increase the availability of soyoil. As a result, India, the world’s biggest buyer, may reduce its imports of soyoil and palm oil in the coming months.
According to industry officials, Indian soymeal has become more attractive because of the rally in U.S. soymeal prices. Hemant Jain, an exporter in Indore, Madhya Pradesh, stated that until recently, only Bangladesh, Iran, and Nepal were making purchases. However, now even Vietnam and other Asian countries have started to make inquiries.
The increase in U.S. soymeal futures, which jumped 20% in just five weeks, is attributed to erratic weather causing issues in Brazil, the world’s number one exporter.
Traders in India have already contracted to export around 300,000 metric tons of soymeal for shipments in November and December. The majority of these exports will go to Bangladesh, Iran, Nepal, and Vietnam.
To take advantage of the expected export demand, soybean and soymeal prices in India have surged in the last week. However, this has made exports less competitive. Manoj Agrawal, the managing director of Maharashtra Oil Extractions, stated that for India to truly benefit from this opportunity, Indian prices need to remain on par with global prices.
While soymeal prices have improved, soyoil prices are under pressure due to record inventories of imported soyoil. This has effectively reduced soybean crushing margins. However, a New Delhi-based dealer with a global trade house believes that with the increase in soybean crushing and the high demand for exports and from the local poultry industry, domestic soyoil supplies will strengthen, resulting in a decrease in imports.
In conclusion, India’s soymeal exports are expected to rise as Brazil’s soybean output faces challenges. This offers an opportunity for India to meet the global demand for soymeal. However, it is crucial for Indian prices to remain competitive in order to fully capitalize on this opportunity.
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