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India makes rare purchases of soymeal from China, Ukraine

India makes rare purchases of soymeal from China, Ukraine

By Rajendra Jadhav and Michael Hogan/Reuters on Oct 29, 2015 at 1:37 p.m.

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MUMBAI/HAMBURG - Indian buyers have contracted to import 7,000 tons of non-genetically modified soymeal at around $350 per ton for the first time in years after prices in the local market spiked due to sharply lower soybean production, dealers told Reuters.

The imports would put pressure on local soymeal and soybean prices.

"The poultry industry has contracted Chinese soymeal since it is cheaper than local supplies," said Davish Jain, chairman of the Soybean Processors Association of India.

Traditionally India exports soymeal to Thailand, Vietnam, Japan and Iran, but this year it has been struggling to export due to higher soybean prices.

"I have seen a purchase of 3,000 tons from the Black Sea region, probably from Ukraine, which was bought at around $350 a ton on cost-and-freight (C&F) basis," said a Hamburg trader.

"The imports are being made as a move to put downward pressure on Indian domestic prices to show the market there are alternatives if prices are too high and to push inventory holders into selling."

Imports of genetically modified soymeal is not allowed in the south Asian country.

Soymeal prices in local market have jumped 16 percent in two months to 34,500 rupees ($528.41) per ton as the country's soybean production in 2015 is expected to drop 15.3 percent from a year ago to 7.2 million tons.

For October and November shipments 7,000 tons have been booked and more deals are possible if the wide spread between local and overseas prices remain, said a Mumbai-based dealer.

India had exported 1.05 million tons soymeal in 2014/15 season ended Sept. 30, down from 2.5 million tons a year ago.

"If the government removes 16 percent import duty, then we can see much more imports," said Jain.