MUMBAI (Commoditiescontrol) – Soybean meal gained in the spot markets across the country during the week ended February 11, 2017 amid improving demand.
Soybean meal rose by Rs 200 to Rs 23,400 per metric tonne at the benchmark Indore market of Madhya Pradesh this week.
Price of broiler chicken in benchmark Delhi market were steady at Rs 78/kg during the week ended 11, February 2017.
The demand for broiler chicken is likely to decrease slowly in coming days as peak winter demand is over and from March to June the demand for broiler chicken will reduce by 10-15 percent as consumers don’t prefer to eat chicken during summer season resulting in slow demand for soymeal.
As of now poultry farmers are making profit of around five percent, but margins are likely to shrink ahead amid expectations of decrease in broilers rate, which may prompt them to source soybean meal as per requirements.
As the chicks price is trading at Rs 35 which is higher by around Rs 10 over last year same period which is forcing poultry farmers to place the chicks at slower rate hurting demand for soybean meal.
Stock with crushers in the country are likely at 2.5-3 lakh tones, which is likely to meet the poultry demand of one month along with soymeal produced on day to day based crushing activity which is happening at average pace as the crushing margin is in disparity due to fall in soymeal prices.
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From above chart we can see that soymeal demand increases when price fall to Rs 22,500-23,000 per tonne level irrespective of broiler prices.
In other news India soybean meal exports during the month of January dropped sharply by over 35 percent at 1.55 lakh tonnes against 2.41 lakh tonnes a month ago, The Soybean Processors Association (SOPA) said in a release on Monday.
The traders were upset with export numbers as they were expecting that India exports to be around 3.5 lak tonnes as India soymeal was in parity of around $30-35 during the January month.
India at least need to export 3-4 lakh tonnes of soymeal for next five to six months then only it may offset bumper supply of raw material i.e. soybean.
As per trade source overseas buyer are waiting for outcome of upcoming Argentina soybean crop.
India Soymeal is priced at $372 per tonne FAS Kandla Vs $396 Argentina CIF Rotterdam (Mar) as of February 4, 2017. The difference between the two origin is $24 per tonne.
India soymeal is in parity of $24 compared to Argentine soymeal but India FAS Kandla prices have fallen by around 20 dollars as the rupee has appreciated in recent times which is discouraging factor as far as soymeal exports are concerned.
The bottom line is that soymeal is like to trade range bound next week as demand from poultry feed manufacturer will fade around Rs 23,500 - 23,700 per tonne as it will increase the input cost so poultry farmer may incur losses and availability of soymeal is good which will also weigh on prices at higher level but around Rs 22,500-22,700 per tonne poultry farmer are making profit of around five to ten percent coupled with improving exports at lower level which will provide support to prices.
(By Commoditiescontrol Bureau; +91-22-40015533)
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