Tuesday, May 15, 2012

-- Iran buying around 100,000 tons soymeal from India each month

-- Iran paying a premium of around $20/Ton for Indian soymeal

-- India's 2011-12 soymeal exports to rise to 4.5 million tons

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   By Biman Mukherji and Debiprasad Nayak 
   Of DOW JONES NEWSWIRES

NEW DELHI (Dow Jones)--India will likely export between 500,000 and 600,000 metric tons of soymeal to Iran this marketing year as the Middle Eastern nation scouts for feed material supplies following western sanctions.

The country, one of Asia's top soymeal exporters, expects to export a total of around 4.5 million tons in the year ending Sept. 30, up from around 4.1 million tons last year.

India has already exported around 200,000 metric tons of soymeal to Iran in the last two months, Rajesh Aggarwal, a spokesman of the Soybean Processors Association of India, told Dow Jones Newswires. "They [Iran] are buying about 100,000 tons each month."

Iran is paying a premium of around $20/ton for Indian soymeal over international prices, setting a higher price benchmark for supplies from the country, he said.

India and Iran recently arrived at a payment mechanism, as tightening western sanctions made payment in dollars difficult.

The mechanism allows Indian oil importers to make 45% of their payments in rupees, which Iran parks in a local bank and uses to settle payments to Indian exporters.

Last week, an Iranian trade delegation visited India to buy, rice, sugar, soymeal and wheat. India is also keen to export agri-commodities following a bumper crop.

The demand for Indian soymeal was equally strong from Japan, traditionally the largest buyer, as well as South Korea, Pakistan and Bangladesh, Aggarwal said.

Iran emerged as the largest importer of Indian oilmeal in April, surpassing Japan.

The expectation of a smaller crop in South America has also helped Indian soymeal exports.

South America's soy output will likely fall more than 14% due to dry weather, the United Nations' Food and Agriculture Organization said earlier this month.

However, India's soybean production is expected to rise about 12% to 10.65 million tons, according to the Central Organisation for Oil Industry & Trade.

"Oilmeal exports are very lucrative now for an exporter due to the weak rupee. The only problem is that seed prices are high and that is affecting oilseed crushing," B.V. Mehta, executive director of Solvent Extractors' Association of India, said.

The rupee has plunged to near record lows due to a widening current account deficit and greater economic challenges that have hurt investor inflows.

-By Biman Mukherji and Debiprasad Nayak, Dow Jones Newswires; 91-11-43563335; biman.mukherji@dowjones.com

(END) Dow Jones Newswires

15-05-12 0812GMT