India, which was exporting soymeal to China until three years back, has started importing it from its northern neighbour as global prices have dropped following a huge soybean crop in Brazil and the US.
Feed makers are said to have contracted imports of about 10,000 tonnes of soymeal, sources said.
India exports soymeal to South East Asian countries such as Vietnam, Thailand and Indonesia, besides neighbouring Bangladesh, Pakistan and Nepal. Indian soymeal has been always at a premium over other countries as there is no genetically modified (GM) soybean grown in India. Exporters have been able to get a premium of about $50-$60 a tonne as the product is marked as non-GM feed.
In July 2006, the commerce ministry appointed the Export Inspection Council of India to issue a non-GMO certificate for soymeal exports as there is preference for it, particularly in Europe.
Currently, soymeal imports attract a customs duty of 15 per cent which is considered very low as a check on overseas supplies to India. There is also a rule that stipulates that only non-GM soymeal can be imported into India. When China has been importing GM soybean, how can it make non-GM soybean, sources asked.
It is difficult to check imports, as has been happening with edible oils, an exporter said, requesting not to be identified as he does not want to be seen to oppose imports. “Those who are planning to import, they also buy from us,” he said.
Feed makers, who have contracted to import from China, will be getting soymeal at about $480 a tonne (Rs 31,394 a tonne) at their doorstep while the Indian product will cost them about Rs 35,000 a tonne plus freight, the sources said.
China imports about 79 million tonnes of soybean annually as its production has been falling while consumption has surged, according to the US agriculture department data. As it is the world’s largest importer of cooking oils, it is logical that they are also making meals after buying soybean seeds from the US, the sources said.
After a surge in soymeal production by 46 per cent in the past five years, China has been aggressively exporting the animal feed with 1.6 million tonnes estimated for the current year as compared to just 472,000 tonnes in 2010-11. China’s import of soymeal fell to 20,000 tonnes from a level of about 300,000 tonnes five years ago, according to USDA data.
In contrast, India exported 10.5 lakh tonnes of soymeal in the marketing year ended September 30, according to soybean processors association of India (SOPA) data. Shipments dropped to 1.1 million tonnes in marketing year 2014-15 from a record 4.8 million tonnes in 2010-11, according to USDA.
Soybean crop in Brazil is expected to rise to 100 million tonnes this year from 96.2 million tonnes last year while the US is likely to harvest about 106 million tonnes against 107 million tonnes a year-ago. As a consequence, global prices of soybean have dropped 13 per cent since January 1 this year.