Indian quake may force Japan to seek US soymeal
A devastating earthquake that has wreaked havoc in India's busiest port of Kandla may drive Japanese soymeal importers to turn to the United States for shipments for March onwards, traders said on Wednesday.
But Japan's soymeal imports from India for February shipment appeared to be little affected by the massive earthquake that destroyed much of Gujarat last Friday, they said.
"We see little impact on our soymeal shipments set for February from India because the cargo will be loaded at an eastern port," said a trade house trader.
About three cargoes of Indian soymeal are to be shipped to Japan in February, but the cargoes, estimated at a combined 35,000 tonnes, will come from India's eastern ports, traders said.
Japan, like other Asian importers, prefers Indian soymeal because the shipping period is shorter than from the United States and buyers do not need to use large ships.
Japan is seeking soymeal for animal feed for March shipment, but domestic importers are reluctant to start negotiations for Indian soymeal because of growing concerns about shipment delays due to the earthquake, traders said.
"We are still receiving offers for Indian soymeal, but we are concerned about not only the Kandla port situation but problems with inland transportation in India," said an oilseed trader at a leading trade house.
Indian soymeal was offered at $230-$235 a tonne, C&F, little changed from a week earlier, he said.
Kandla handles 17 per cent of the cargo passing through India's 12 largest ports, including petroleum products, crude oil, chemicals and agricultural commodities such as cooking oil and soymeal. It serves the hinterland of western, central and northern India.
Japanese importers are keeping a close eye on the Indian situation due to concerns that it could lead to supply tightness in the domestic soymeal market, traders said. If India is unable to export soymeal, Japanese importers would cover some of their needs for March shipment from the domestic market, said another trade house source.
But domestic importers would eventually turn to US soymeal for several months before the South American season kicks in, since swelling domestic soyoil stocks would keep soybean crushers from increasing soymeal output, he said.
US soymeal would also be attractive because domestic importers could not replace Indian soymeal with rapeseed meal, an alternative to soymeal, due to tightness in the market, he said.
Japan imported 328,000 tonnes of soymeal from India and another 370,000 tonnes from Brazil in 1999.
Japan imports an average of 800,000 to 900,000 tonnes of soymeal each year. Most of the country's annual soymeal demand of some 2.88 million tonnes is supplied by the local soybean crushing industry.