India is one of the largest exporters of animal feed in the world and is always in constant competition with U.S. and Brazil when it comes to export feeds to its largest markets like Vietnam, Japan and South Korea. However, India’s export of soybean meal, the ingredient of animal feed, may face a significant drop this year as the farmers are stocking soybean meal, hoping for an increase in the price of domestic market, having seen a drop in oilseed production.
The total production of soybean meal might reach 9.05 million tons by the end of June, a sharp decline from the government’s forecast of 9.94 million last November. One of the major reasons behind the decline in soybean meal is lack of rain in Madhya Pradesh and Maharashtra, two biggest producing regions in the country. India, who exports more than 70 percent of total animal feed, saw 25 percent decline in its soybean meal exports last month. The price of soybean meal in the Indian market dropped by 38%, a heavy fall since last July, coinciding the demand and price fall in the U.S. market.
This is bad for the importers of other countries. On the other hand, it may help some exporters in America as they will be able to increase the price of animal feed some.
(This entry was first published in February 2009. Because of a technical problem, the entry had to be deleted and I am reposting again now.)