Faced with a steep 45% decline in exports between April-November, oilmeal exporters have urged the government to incentivise its shipment to abroad.

India’s oilmeal exports have been witnessing steady decline over the last three years. After a record 5.60 million tonnes of oilmeal exports in 2011-12, its shipment fell to 4.85 million tonnes in the following year and 4.33 million tonnes in 2013-14.

But, the year 2014-15 has been the slowest in many years with overall exports at 1.42 million tonnes between April – November period as against 2.6 million tonnes in the corresponding period last year.

Used as a bird feed and an animal feed, demand of oilmeals indicates global economic direction. With weak global economies, spends on bird feed and animal feed hit resulting into a slowdown in India’s oilmeal exports. Also, India’s perennial importers have diverted their orders to South American countries including Brazil and Argentina.

“Situation can only change with higher import duty imposed on edible oils which in turn can support the export of soybean meal. The government should also consider to give higher Vishesh Krishi Gram Upaj Yojana (VKYUG) on export of oil meals to provide some support to check the falling export,” said Pravin Lunkad, president of the Solvent Extractors’ Association (SEA).

While the government raised import duty by 5% all across, the industry termed the raise insufficient to make any significant change.

“It is practically impossible to recover the 45% decline of the first eight months in just remaining four months of the year. Even if we assume that a positive crushing parity to stimulate domestic oilmeal production and intermittent buying from China and Iran, Indian exporters may be able to recover not more than 15% of the fall. Still, oilmeal exports witness a decline of at least 30% this year,” said Anil Agrawal, managing Director of Sanwaria Agro Oils Ltd.

Sanction hit Iran has started purchasing oilmeals from Brazil and Argentina which works out to cheaper of upto $100 a tonne than import from India. Also, European countries have opted to purchase from these natural global suppliers.

While India’s oilmeal exports to Iran fell by a steep 70% at 242,291 tonnes between Apr – Nov 2014, that of European Union nosedived by a staggering 83% to a mere 65,304 tonnes in the first eight months of the current fiscal compared with 379,056 tonnes in the comparable period last year.

Exports to Taiwan and South Korea also fell by 29% and 19% to 54,584 tonnes and 568,275 tonnes respectively in the period under consideration.

“Owing to negative crushing parity, crushing mills have piled up seeds as they incur losses in oil which they try cover up through elevation in oilmeal prices. This makes Indian oilmeal costlier than other origins like Brazil and Argentina,” said Agrawal.Also, due to high price of soybean, India is totally out priced in the international market by $ 50-60 against other origins.

Source:- business-standard.com