MUMBAI, May 23 (Reuters) - India’s oilseeds industry body has cut its soymeal export forecast by 25 percent from its previous outlook as an appreciating rupee and a correction in global prices make Indian supplies uncompetitive.
India may export 1.5 million tonnes of soymeal during the 2016/17 marketing year that runs from October to September, said B.V. Mehta, executive director of a Mumbai-based trade body Solvent Extractors’ Association (SEA).
Lower shipments from India will help South American countries like Brazil and Argentina to increase soymeal sales to Asian buyers like Vietnam, Thailand, Japan and Indonesia. Soymeal is typically used as animal feed.
It will also prompt farmers to cut soybean cultivation and shift to other crops like cotton in the upcoming sowing season.
“We are out-priced right now due to strengthening rupee,” said Mehta. “At the same time global prices are coming down due to weakening of Brazilian real.”
India’s rupee has strengthened more than 5 percent so far in 2017, while the Brazilian real fell 4 percent last week.
Soymeal prices in India have risen nearly 10 percent in the past three months to $390 per tonne on a free-on-board (FOB) basis, while global prices dropped 8 percent to $307 during the same period.
At the beginning of the season, the SEA was expecting shipments of 2 million tonnes during the 2016/17 marketing year because of higher soybean output.
India may produce 10.6 million tonnes of soybeans in 2016/17, up 47 percent from a year ago, said the SEA.
“Mills are not getting new export orders due to price disparity,” said D. N. Pathak, executive director of the Soybean Processors Association of India (SOPA).
The country’s exports fell to 111,800 tonnes in April from 180,884 tonnes in March, according to data compiled by SOPA.
The slowdown in exports has pulled local soybean prices to the lowest level in more than five years, which could prompt farmers to shift to other crops in the next season, industry officials said.
“I recovered mere production cost this year from soybean planting. In the coming season I am planning to shift to cotton,” said a Mahesh Suryawanshi, a farmer from the western state of Maharashtra, a leading soybean producer in India.
Indian farmers start the sowing of summer-sown crops in June with arrival of monsoon, which is expected to deliver normal rainfall this year. (Reporting by Rajendra Jadhav; Editing by Christian Schmollinger)