A major congestion at two of the key ports has hurt soyameal shipments by India, the world?s fourth-largest supplier, in the first two months of the current oil year that started October 1, compounding worries of exporters struggling to stay competitive in the global market due to rising raw material costs despite a weakening rupee, industry executives said on Friday.
?Commodities are lying at Kandla and also at JNPT, so soyameal exports have been hit…. Container availability is tight,? said Rajesh Agrawal, the co-ordinator of the Mumbai-based Soybean Processors Association of
India (SOPA).
Soyameal exports dropped by more than 19% during October and November to 6,90,837 tonne from a year before, SOPA data showed. The data doesn?t include supplies to other Saarc nations by rail or road.
Agrawal said a more than 12% depreciation of the rupee against the dollar this year hasn?t helped exporters much. ?When dollar gains
(after a financial slowdown), international prices of soyameal will go down, and it?s difficult to maintain your margin and stay competitive in such a situation,? he said.
Adding to the worries, soyabean prices are rising despite a bumper harvest as farmers are holding back stocks to earn better returns, he said. Soyabean prices have gone up by R1,000 per tonne in the past one month to around R23,000. Much depends on the soyabean harvests in top exporters, Brazil, Argentina and the US. ?The crop data by United States Department of Agriculture data, expected to be released later on Friday, holds the key. If these three nations have good crops, then global prices will fall further, eroding our margins,? Agrawal said.
The freight-on-board prices of soyameal were ruling at an average of $342.80 in October, down sharply from $404.66 a year earlier, due to the financial crisis and better soyabean crops in key countries, another industry executive said.
Soyabean is crushed into soyameal for animal feed and into soyaoil for cooking and alternative fuel. Soyameal is added to poultry feed as a form of protein to boost the birds? growth. The country typically exports around 70% of its annual production. The country will likely produce a bumper 11.93 million tonne in 2011-12 on good planting and plentiful rains, according to the SOPA estimate.
Earlier this year, industry executives were expecting soyameal exports to rise by 2,00,000 tonne in 2011-12 to
5 million tonne on a bigger soyabean harvest and decent global demand. ?The congestion at ports may be settled in around a month. Lets see,? Agrawal said. India competes with Brazil and Argentina for soyameal exports to countries including Japan, Vietnam, South Korea and China. However, suppliers in India have an edge over their South American rivals in terms of freight differential due to the country?s proximity with key buying nations.