Kandla port damage hits soymeal exports
Nao Nakanishi in Singapore
India's earthquake, which has killed up to 20,000 people, has halted the country's exports of soymeal due to serious damage at the busiest port of Kandla and to other transport networks, traders said on Monday.
Despite a report from India on Sunday that Kandla had resumed operations, traders here said the quake had caused major difficulties in executing existing contracts to ship soymeal to other Asian countries.
No new offers for Indian soymeal have been seen since the earthquake hit Gujarat early on Friday.
"This is giving us serious headaches," a trader at a major international house said. "People focus on execution for now, not new business... the port of Kandla is severely damaged and the supply was cut. Transportation is a problem."
Traders said information was sketchy and it was unclear if ships could go to other ports for loading.
Some traders said vessels were lining up at Indian ports, including Kandla, to carry a total of about 180,000 tonnes of soymeal to countries, such as South Korea, Vietnam, Indonesia, Thailand and the Philippines.
Malaysia has not bought Indian meal for some time. Asked how long it would take for business to resume, the trader at an international house said: "They are talking about February 5...but it may be optimistic."
Asian buyers switching to South Amercia
Traders have said India has outpriced itself in the soymeal market, with most Asian buyers, including South Korea, looking to switch to South America as early as possible, especially in view of record crops expected in Brazil and Argentina.
Indian soymeal prices fell to around $230 C&F, Southeast Asia, by early last week -- before the Chinese New Year holidays -- compared with its peak of around $245 late last year.
But low-protein soymeal from Brazil or Argentina was available at prices below $200 per tonne, C&F Southeast Asia, for shipment after April/May, traders said.
"People certainly would delay their buying decisions as long as possible because the market is in the downtrend right now," another trader said.
"People would hold off, obviously with one eye on South America, hoping things come earlier from there and that they do not have to buy comparatively expensive crops," the trader said.
India soymeal exports set to drop
Even before the earthquake, traders here said Indian soymeal exports were set to decline this crop year to end-September from around 2.3 million tonnes the previous year.
"People are thinking about correcting downwards their (soybean) crop estimates to 4.2-4.3 million, instead of five million," a third trader said. "The bean delivery at the local market is extremely slow."
Unlike a year ago, Indian soymeal suppliers sealed lots of deals at the start of the season in September/October when they offered prices well below the market.
This boosted Indian soymeal exports in October and November to more than 500,000 tonnes, compared with 170,000 tonnes in the same period a year ago, traders said. Shipment by end January is set to reach some 1.20-1.35 million tonnes. "The meal exports have been above average, faster than last year. So we all say there's not that much left," the trader said.
Traders have said in addition to a likely smaller soybean crop, low vegetable oil prices in India, largely due to huge imports of palm oil from Malaysia and Indonesia, had affected crushing activity in the country.