20000105

Asia grain: India meal sought, eyes on govt moves

SINGAPORE, Jan 4 (Reuters) - Indian soyameal is seeing strong demand in Asia, and all eyes are on the Indian government's large supply of soyabeans, procured to soothe farmers angry over low prices, traders said on Tuesday. "There's one person with (more than) 300,000 tonnes of beans, which for India is an enormous position," said a trader.

"No one knows when they (the government) are going to crush, and when they crush, how are they going to market meal and the oil?"

Late last month, the Indian government said its total bean procurement in the current business year was likely to be as high as 400,000-450,000 tonnes, with 315,000 tonnes purchased by December 17.

In a rare practice, the Indian government was forced to buy soyabeans from farmers who were upset over low domestic prices due to huge edible oil imports and a global beans surplus.

With many short positions in low-priced Indian soyameal for January and February shipments, traders were watching the fate of government soyabeans, which should amount to nearly 10 percent of the total crop of some five million tonnes.

"There's lots of lots of shorts out there," said the trader. "There will be enough demand to take away the meal, which is produced...yet if they (the government) come to the market with 50,000 tonnes of meal on one day, then that's also too much."

Reflecting strong demand for Indian soyameal, prices edged up to $175/$176 per tonne, C&F Southeast Asia, for February shipments, compared with the low of around $170/$171 for November and December shipments, traders said.

They said it was also still too early to say whether changes in import duties for vegetable oils last week would curb imports and encourage more crushing in India.

The duties were much lower than around the 40 percent level that many had expected. In addition, there was confusion over the tax for crude edible oils.

The government said it stood unchanged at 16.5 percent for refiners and rose to 38.5 percent for traders. "Nobody is exactly certain what the rules are, and still there's plenty of confusion," another trader said.

"But the beans market did rise in India yesterday to 8,500 rupees (per tonne)...Bean prices will continue to rise because harvest pressure is over."

Some traders said higher beans prices should lead to higher meal prices. Others said possible increases in edible oil prices might result in lower meal prices.

INDIAN EXPORTS SEEN AROUND TWO MILLION TONNES

With deals for slightly more than one million tonnes of Indian soyameal seen done so far, traders expected Indian exports to come close or even exceed two million tonnes this business year, compared with about three million tonnes the previous year.

The total should be enough to cover regional needs in the absence of imports by China, which purchased nearly one million tonnes of Indian soyameal last year, they said.

Still, some traders worried that supply might become tight for February and March as South American meal was not expected to arrive in Asia until May. -Reuters