There’s reason to cheer for soybean exporters and traders. Increased area under cultivation and adequate rainfall could very well mean enhanced domestic and overseas sales this FY.
A total of 10.61 million hectares is currently being used for the cultivation of soybean this year as compared to the previous year. An increase of 1.2% to be exact.
Traders and exporters, however, reveal that the prices of the crop will naturally fall once harvested. Currently, a quintal of soybean commands Rs 3,700. It’s not a price that will support exports.
“Export of soymeal and other value added products will be better than last year, and so will domestic consumption from poultry industry, with hope of a good crop,” said Satendra Aggarwal, operations head at Ruchi Soya Industries.
India exported 7-7.5 million tonnes of soybean in 2014-15, significantly lower than the 11-12 million tonnes exported in 2013-14.
Industry experts expect soybean production to cross 9 million tonnes if the September monsoon rains are equally distributed and not heavy.
“Countries like Iran, Middle East and China want Indian soyameal crop as we are non GMO,” said Aggarwal.
82% of soybean procured is processed to obtain soymeal which is majorly used in the animal feed industry. The remaining 18% is used to produce soya oil.
“This year, we can easily export 3-4 million tonnes of soyameal, compared with 0.4 million tonnes in the previous year. We are requesting the government to increase customs duty on imported oil as Indian meal prices will decrease and we can further export,” said Davish Jain, chairman of Soybean Processors Association of India.
12.5% is the import duty for crude soyabean oil. Industry members feel the import duty should be above 30%.
“In the last one year, the international market crashed due to a bumper crop of 275 million tonnes worldwide, largely in the US, Brazil, Argentina and China. Prices have now crashed and come down to $400 a tonne, compared with Indian price at $500-550 a tonne for soyameal,” said a trader from an MNC based in Mumbai.