* Exports seen rising to over 2 mln T in 2016/17 from 261,501 T yr earlier
* Soymeal prices drop 25 pct, make exports viable
* Traders contract to export 500,000 T in Dec-March
By Rajendra Jadhav
MUMBAI, Dec 14 (Reuters) - India's soymeal exports in 2016/17 are likely to jump to three-year highs as a sharp price correction due to a rebound in soybean production makes overseas sales competitive, said industry officials.
Higher exports from India could trim shipments of South American soymeal into Asia, and also shore up local soybean prices, which fell below a government-fixed support level in physical markets recently.
India's soymeal exports could jump to more than 2 million tonnes in the 2016/17 year that started on Oct. 1, from 261,501 tonnes shipped in the previous year, Atul Chaturvedi, president of industry body Solvent Extractors Association of India, told Reuters.
"Now, Indian values are more or less aligned with world values and that's why exports are taking place."
Soymeal prices on a free-on-board basis in India have plunged 25 percent in the past four months to $365 per tonne due to a jump in local soybean production, dealers said. Soybeans are crushed to produce oil and meal.
India struggled to export soymeal in 2015/16 as local prices jumped following a steep fall in soybean production due to a drought.
This year, India is expected to harvest 66 percent more soybeans at 11.5 million tonnes as the south Asian country received normal rainfall, estimates the Soybean Processors Association of India (SOPA).
"Our local consumption is around 5 million tonnes. So, we have ample soymeal for exports," said D.N. Pathak, executive director of SOPA.
Thailand, Japan, Vietnam, Myanmar are among the key buyers of Indian soymeal, which is not genetically modified.
In November, India's soymeal exports more than doubled from a year earlier to 61,003 tonnes, according to SOPA.
Traders have contracted to export around 500,000 tonnes soymeal for shipments in December-March, said an oil miller based in the central Indian city of Indore.
"We are very much competitive right now. We are getting good amount of orders from Asian buyers due to lower freight rates," the miller said.
Soybean supplies in spot markets were disrupted in the last few weeks after Prime Minister Narendra Modi scrapped 500-rupee and 1,000-rupee banknotes on Nov. 8 to crack down on rampant corruption and counterfeit currency.
"Supplies dropped last month, but now mills are getting enough beans for crushing," said Pathak of SOPA. (Reporting by Rajendra Jadhav; Editing by Subhranshu Sahu)