Indian soymeal exports set to soar this season

Lower soybean output from Argentina on the back of drought in key growing areas has led to exports of soymeal from India soaring so far this season. According to the Soybean Processors Association of India (SOPA), exports from October 2022 to January 2023 reached 631,000 tonnes, which is significant compared to the total volumes exported in the previous season (October 2021 to September 2022) at 644,000 tonnes. Argentina’s Rosario Grains Exchange (BCR) revised its soybean output estimates lower by 6.7% month-on-month (m-o-m) to 34.5 million metric tonnes in its February report, the lowest output since the 2008/2009 season. Lower exportable supply from Argentina this season has thus led to competitive soymeal prices in India (top edible oil importer). As such, many buyers have now turned to India for supply to meet animal feed demand which has now led to increased crushing activity in the country.  

An increase in soybean crushing activity in India for meal could mean that more oil is produced as soymeal is typically a co-product of soybean oil extraction. Market sources have stated that demand for meal and, consequently, exports from India could remain high until at least mid-April. This would also be largely dependent on the record Brazilian crop (+18% y-o-y, to 153 million metric tonnes) which has limited upside risk to prices. In China, another major vegetable oil importer, demand remains a key watch point and may rise in the coming weeks. According to market sources, soybean oil stocks reached 628,200 metric tonnes as of Friday 10th February, a decline of 2.9% week-on-week.