US sanctions against Iran likely to hurt India’s oilmeal exports

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Updated: May 9, 2019 12:17:22 AM

The decision of the US has caused ripples in the Indian edible oil industry with exporters confused about the future of oilmeal exports to Iran.

US sanction, Iran, India, US, oilmeal exports, oilmeal, soyameal, edible oil, financial express, financial express newspaper, financial express todayकीमतों में गिरावट की मुख्य वजह मांग की तुलना में अधिक आवक है.

The latest US sanctions against Iran has barred Asian buyers, including India, from importing oil from Tehran. Iran was shipping oil to India at disco unted rates.The decision of the US has caused ripples in the Indian edible oil industry with exporters confused about the future of oilmeal exports to Iran.

Solvent Extractors Association of India (SEA) executive director BV Mehta said there was concern among Indian exporters if the exports of oilmeal could continue to Iran in the wake of sanctions imposed by the US. Exporters are worried that if they should enter into contracts with Iran for soyameal and oilmeal exports, India would no longer exempted by the US. Therefore, there is uncertainty in the market, Mehta said.

Soyameal exports to Iran for 2018-19 stood at 508,050 tonne, far higher than 22,910 tonne reported in the previous year.
Iran had emerged as the third largest importer of Indian oilmeals, followed by South Korea with 738,795 tonne and Vietnam with 615,403 tonne.

The country’s trade with Iran further got a boost after it had revised its payment mechanism for India and started accepting payments from India in rupee and used that fund to pay for its imports from India. Now, this is no longer possible, Mehta said. The Iranian market had opened up for Indian soyabean meal since the Iranian feed industries are looking at India for their requirement of soyabean meal, supporting the export of oilmeals from India, SEA had stated earlier.

However, the prospects of export to China is less likely to yield any fruit for Indian oilmeal exports. According to the SEA, the export of rapeseed meal and soyabean meal to China is “unlikely to resume during the current financial year as procedure for the registration with Ministry of Agriculture, China, is too cumbersome to complete all formalities.”

Contracts had been signed by exporters with five companies and only two of these seem to be in the pipeline, he said, adding that the procedure in China is lengthy and laborious and many exporters, therefore, were unable to complete the formalities. SEA highlighted that India should target mustard production of 100 lakh tonne by 2020 and 200 lakh tonne by 2025 to reduce the nation’s dependence on vegetable oil imports.

Currently, the country’s dependence on imported edible oil is to the tune of 70%. The SEA-Rapeseed-Mustard Promotion Council reflected that if India had to be saved from importing oil, mustard seed production targets have to be fixed. SEA president Atul Chaturvedi said there was a huge scope for production of mustard cultivated on less water.

Agriculture commissioner of India SK Malhotra said mustard production had increased in the past three years by implementing the suggestions given by the SEA. BV Mehta said the roadmap had been prepared and stakeholder committee will soon be formed to look into this issue. The stakeholders committee would consist of government, scientists, farmers and traders and they would look at ways to improve productivity, he said.

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