Soymeal & corn exports in FY14 seen down 28%

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Summary* Buyers opting for cheaper supplies from S America

India’s soymeal and corn exports are expected to drop more than a quarter to a total 6 million tonne (mt) in the year to September 2014 as buyers opt for cheaper supplies from South America, trade sources said earlier this week.

Latin American producers, which compete with India to sell animal feed in markets such as South Korea, Japan, Vietnam, Thailand and Iran, have already raised sales to Asian buyers.

“Soymeal prices in India are ruling high on lower soybean output as rains in October caused severe damage to the crop during the start of harvest,” said Rajesh Agrawal, chief co-ordinator at Soybean Processors’ Association of India.

Indian soymeal — the main protein ingredient in animal feed derived by processing soybean — is priced at around $570 per tonne, about $20 costlier than supplies from South America.

The country is expected to sell 3 mt each of soymeal and corn in 2013-14, a decline of almost 28% from a total 8.3 mt exported a year ago, traders said. An expected 14% drop in India’s soymeal output to 7.8 mt in 2013-14 will also drag on exports, they said.

While corn output is expected to be slightly higher at 22.5 mt, overseas sales by Asia’s top exporter of the grain will come off about 38% on year amid high prices.

Indian corn is priced at about $220 per tonne, also around $20 more than global prices due to ample supplies from countries such as the United States, Brazil and Argentina.

“Despite a good crop year, India may not be able to export much because domestic prices are higher and the international market is flooded with cheap American supplies,” said Amit Sachdev, India representative of the US Grains Council.

Traders said domestic demand for soymeal and corn was likely to remain flat as a slowdown in the Indian poultry industry, the biggest consuming sector, would cap consumption.

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