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France buys soyameal -- EU ban triggers flood of enquiries

G Chandrashekhar

MUMBAI, Dec. 8

WHILE the European Union (EU) ban on the use of meat-cum-bone meal in ruminant feed may improve the overall marketing prospects of soyameal, the development is likely to help India at least to a limited extent in selling soyabean extraction to European d estinations if the flow of enquiries being received is any indication.

Most buyers in Europe are waiting and watching developments in the marketplace. However, France has gone ahead and purchased a shipload of 20,000 tonnes of Indian soyameal. The shipment was completed recently from Mundhra port. Interestingly, it was Fran ce, which first announced on November 13, a ban on meat and bone meal use in animal feeds, which set the stage for a EU wide ban later.

As the EU ban on use of meat-cum-bone meal will be valid for six months, there are expectations that the pace of sourcing from India may gather some momentum over the coming weeks. Of course, price and quality would be major considerations. Acceptance of Indian quality on arrival of the first consignment at the destination would be key to further business.

It is unlikely that market conditions in the EU will undergo drastic changes soon, many trading houses believe. This is because any scientific enquiry, resultant inferences and formulation of responsive government policy would take time.

If the ban remains unchanged there is strong possibility that export prices could improve, albeit slightly, from the current levels, although the extent of price rise will be tempered by additional supplies.

According to global agribusiness player, Cargill, generally the EU produces approximately 2.0-2.5 million tonnes of meat and bone meal per year, of which around 25-30 per cent are exported. Actual use within the EU shows a wide variation and can range fr om one million to 3 million tonnes, Cargill said. Soyameal will be the most logical first alternative feed material.

To service a part of the EU demand for soyameal, India will have to reckon with aggressive marketing strategies and fierce competition from US origin soyameal over the next three months and later, from March 2001 onwards, from South American (Brazilian, Argentine) soyameal.

A major selling proposition for Indian soyameal will perhaps have to be its non-GM status. Indian exporters have so far not exploited this attribute. It is time they did.

From out of the new crop, so far, about 10 lakh tonnes of soyameal have been committed for export, most of it for Far East destinations. Estimated shipment during November was 4.5 lakh tonnes and projected shipment in the current month is 4 lakh tonnes.

Under normal circumstances, India should be in a position to sell a further 10 lakh tonnes. It remains to be seen how much additional export beyond 20 lakh tonnes materialises in the wake of the latest development in the EU.