A report from the USDA on August 12, following on from local speculation that the Indian government supposedly was set to back foreign-origin soybean meal (SBM) imports, indicated that a 16.5% basic customs duty would be imposed on the meal.
“However, due to the absence of any notification, or official written guidance from the Indian government at present, there is high uncertainty on how this import quota will be implemented through October 31, 2021,” noted the US agency’s publication.
Despite the uncertainty, sources told the USDA that Indian buyers are now starting to contract for SBM imports from neighboring Bangladesh, Vietnam, and for transshipments from the US and other origins.
Record highs in soymeal price
SMBl is India’s most popular animal feed protein source. But the USDA noted that in January 2021, Indian domestic soybean meal prices commenced to climb without warning. Prices in recent months have rocketed to unprecedented highs.
Domestic soybeans prices have rocketed to an unprecedented high of US$1,023 (INR 76,000) per MT, representing an increase of 92% above the current minimum support price of US$532 per metric ton. Some markets are reportedly charging new highs of US$1,400/MT due to significant feed shortages.
The high feed costs are being passed onto Indian consumers in the form of increased domestic poultry prices, reaching US$3.50 per kilogram, and higher egg prices; India’s poultry feed industry has aggressively petitioned the Indian government for relief, seeking authorization to import SBM derived from GE soybeans.
India’s domestic soybean crop will not be harvested until October 2021, with crush and meal production not anticipated until mid-month, reported the USDA.
Speculation and hording blamed
The Soybean Processors Association of India is placing the blame for this year’s SBM price spike squarely on the shoulders of excessive speculation and hording.
“While this is true, 2021’s runaway prices are also result of highly competitive pricing of Indian soybeans and meal at the end of December 2020. In the first half of market year (MY) 2020/2021 (October-September), India significantly increased its soybean exports to neighboring foreign markets such as China and Bangladesh. In the same period soybean meal exports doubled due to competitive pricing and global supply constraints such as an initial forecast of a short Brazilian soybean crop, as well as bottlenecks in Argentine shipping ports.
“Higher export volumes drew down domestic supplies, causing price speculation compounded by reports of hoarding in the market. The 2021 southwest monsoon has also been erratic, starting-stalling-restarting and dumping at times very heavy rains in the soybean production states, further fueling speculation about bean yields and meal availability in the upcoming MY 2021/2022,” found the USDA report.