Indian traders have cancelled soymeal export contracts for the first time since 2021 after a sudden rise in domestic soybean prices changed the direction of trade. According to reports from Zee News, around 25,000 tonnes of soymeal export deals scheduled for May and June shipments have been cancelled, while traders have instead moved towards importing nearly 80,000 tonnes of soybeans from African countries. The decision was taken after local soybean prices climbed over the past month and made it difficult for exporters to honour earlier commitments at previously agreed prices.
Trade sources said the jump in soybean prices in India pushed soymeal production costs much higher within a short period. As reported by Reuters, one dealer explained that "It was not possible for sellers to absorb an increase of $200 per tonne on their own. So, they mutually agreed with buyers to cancel May and June shipment deals." Current soymeal prices stand approximately $200 per tonne higher than the rates prevailing at the time the export contracts were originally signed. Sources confirmed that no penalties were imposed on the cancelled contracts, with both exporters and importers mutually agreeing to cancel the deals.
Local soymeal prices have increased by 41 percent within a month and touched ₹66,000 per tonne, the highest in the last four years. According to trade sources, soymeal export offers for June loading have now reached nearly $695 per tonne on a free-on-board basis, compared to around $475 per tonne just a month ago. The rise in domestic prices has affected India's competitiveness in export markets, with buyers in Asian countries potentially turning towards suppliers in North and South America for cheaper shipments. Lower soybean production has reduced local supplies, which pushed prices higher across the supply chain.
As soymeal exports slowed, Indian traders started increasing soybean imports from African countries. Vinod Jain, founder of agricultural products exporter Suraj Impex, said India is no longer getting fresh soymeal export orders because local prices have become too expensive. India allows imports only of non-genetically modified soybeans, limiting sourcing mainly to a few African countries including Benin, Niger, Togo and Nigeria. Manoj Agrawal, managing director of Maharashtra Oil Extractions, said traders purchased African soybeans this month at prices ranging between $700 and $760 per tonne on a cost, insurance and freight basis for shipments arriving in India during June and July.
The cancellation of soymeal export deals from India is likely to benefit suppliers in Argentina, Brazil, and the United States, while traditional Asian markets continue to weaken for Indian soymeal exports. In the domestic market, the 'plant delivery' price of soybeans has surged rapidly, climbing above ₹7,000 per quintal and is now fast approaching the ₹8,000 mark. Traders and processors expect soybean supplies to be low for the next few months, with supply shortages likely to continue until the arrival of the new crop during September and October. Because of this, traders are increasingly looking at African suppliers to meet the shortage and secure raw material for local processing, with Indian traders having purchased at least 80,000 tonnes of soybeans this month and procurement continuing as local soybean prices hold firm.
