MUMBAI (Commoditiescontrol) – Soybean meal declined in the spot markets across the country during the week ended 11, March amid lackluster demand at higher level.
Soybean meal declined by Rs 200 to Rs 23,000 per metric tonne at the benchmark Indore market of Madhya Pradesh during the week.
Price of broiler chicken in benchmark Delhi market declined by Rs 2 to Rs 88/kg during the week ended 11, March 2017.
The demand for broiler chicken during the week plunged as temperatures are rising in northern part of India and consumers don’t prefer to eat chicken when weather is hot and humid.
As per market participant broiler chicken demand in coming summer season is likely to drop by 5-10 percent which will weigh on chicken prices, indirectly affecting the demand of soymeal.
As of now the poultry sector is making profit of around 6-8 percent on the sales of broiler chicken but as the soymeal price increases profit declines. Soymeal is the major input cost for poultry farmers.
Poultry farmers are reluctant to purchase soymeal at higher level as their profit margin reduces and on the other hand the availability of soymeal is good which is weighing on soymeal prices. Soymeal prices traded in the range of Rs 22,500-23,000 per tonne.
Plants are now having inventory of 2.5-3 lakh tones of soymeal which can easily 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.
The traders are upset with export demand which is not improving as per their expectation so the soymeal prices were trading lower throughout the week.
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.
India Soymeal is priced at $367 per tonne FAS Kandla Vs $379 Argentina CIF Rotterdam (Apr) as of March 11, 2017. The difference between the two origin is $12 per tonne.
India soymeal is in parity of $12 compared to Argentine soymeal but India FAS Kandla prices have fallen by around 15 dollars as the rupee has appreciated in recent times which is discouraging factor as far as soymeal exports are concerned.
Soymeal is likely to trade range bound next week as demand from poultry feed manufacturer fades around Rs 23,500 - 23,700 per tonne as it will increase the input cost due to which 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 at lower level.
(By Commoditiescontrol Bureau; +91-22-40015533)
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