Indian shipment of soybean meal are expected to decline to less than 2.65 million metric tons in the 12 months ending September from 3.59 million tons a year ago. Vietnam, the biggest buyer of Indian oilseed meals, bought 857,690 tons in the year ended March 31, down from 1.51 million tons a year ago. South Korea, the second- biggest importer, bought 477,171 tons, 41 percent lower than a year earlier. India, the top vegetable oils user after China, is yet to crush more than 18 million tons of soybeans, mustard and other oilseeds, compared with a stockpile of 10 million tons that’s deemed normal at this time of the year. Exports for the year declined 41 percent to 3.22 million tons. These figures clearly show the lack luster state of soybean meal exports. With the USDA projecting the world ending stocks higher than their previous estimate, the bearish pressure on the prices just don't seem to go away. There is a huge stockpile of soybean that the Indian crushers haven't crushed yet. Crushers are losing 600 rupees to 1,000 rupees a ton. If they don’t process, they lose on overheads and fixed expenses. No plant in India has made a profit in the last six months. Everyone is under loss. This reflects aptly in the prices, which since our last post has reduced from Rs19000/T to Rs 17200/T for Bangladesh delivery. The export prices have also reduced to about $370 FOB Kandla, but Argentina & Brazil offering at $270. Going forward, we have reached a point where the crushers feel that there is no point in selling cargo at lower prices and incur heavy losses. They better wait and watch for next year. Bangladesh will now shift from soybean meal to maize as its primary feed requirements for the coming month, hence the demand for soybean meal is expected to lessen. Elsewhere, other countries are preferring to import from Brazil & Argentina which are offering a good $100 cheap compared to India. Only in case of immediate requirement do Vietnam and Korea will look towards India. We expect soybean to be neutral to slight bearish in the coming weeks. |
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