India Soybean Meal Exports May Drop as Farmers Hoard

By Pratik Parija

Feb. 20 (Bloomberg) -- India’s exports of animal feed made from soybeans may drop as farmers hoard supplies on expectation domestic prices will rise as production of the oilseed falls.

Shipments may total 4.5 million metric tons in the year to Sept. 30, less than the 5 million tons forecast by the industry in November, Davish Jain, Chairman of the Central Organisation for Oil Industry and Trade, a processors’ group, said.

Reduces supplies from India may support soybean meal prices that have fallen by a fifth in the past year on the Chicago Board of Trade as livestock producers pare inventories to limit losses. India competes with the U.S., Argentina and Brazil to sell feed to buyers including Vietnam, Japan and South Korea.

Farmers expect spot prices in central city of Indore, the country’s benchmark, to reach last year’s record of 2,700 rupees ($54) per 100 kilograms, up from 2,200 rupees now, said Jain.

Soybean meal futures for May delivery fell 0.2 percent to $273 a ton yesterday on the Chicago Board of Trade. Prices have slumped 38 percent from the July peak of $445.

“Farmers are not willing to sell at the current prices,” said Jain, who is also managing director of Prestige Foods Ltd., India’s biggest processors of soybeans.

Soybean production may total 9.05 million tons in the year ending June, compared with the 9.94 million tons estimated by the government in September. Output was 10.97 million tons last year.

“Arrivals in the market is very poor, indicating there’s apprehension about the crop,” said Rajesh Agrawal, a spokesman of the Soybean Processors Association of India.

Indian soybean meal exports fell 25 percent last month from a year earlier to 521,243 tons, according to Solvent Extractors’ Association. Shipments of oilseed meal, including from soybeans, dropped 33 percent to 563,723 tons.

The country, which grows non-genetically modified soybeans, sells more than 70 percent of its animal feed output abroad.

To contact the reporter on this story: Pratik Parija in Mumbai at pparija@bloomberg.net.