China to import 5 lakh tonne of rapeseed meal, may resume soy meal imports too
After a gap of six years, China is all set to resume import of oil meal from India, a move that could double India’s exports of rapeseed meal, popular cattle and poultry feed. As the trade war with the US has forced it to cut imports from the world’s largest economy, China has lifted a ban imposed in 2012 on imports of oil meal from India and approved six plants belonging to five companies, including Adani Wilmar and Gujarat Ambuja Exports, for import of Rapeseed meal.
“We will start export of non-basmati rice, rapeseed meal, soy meal and soybean as China is opening up its market for India,” said Sanjeev Kumar Chadha, Nafed managing director, who led an Indian delegation to China recently. He said Nafed has signed an in-principle agreement with a Chinese trade agency for the export of oil meal and as and when the procedures are completed, shipments will go. He added a Chinese official delegation may come next month to inspect soybean processing plants so that they can resume the process of approval.
Nafed has a rapeseed inventory of 8 lakh tonne. Increased exports due to the Chinese demand will benefit largely traders; since rupee is weak, the realisation would be higher too. Sustained Chinese demand could, however, help farmers too as rapeseed prices could go up in the next procurement season starting April 2019.
Rapeseed meal accounts for a fifth of India’s oil meal exports. Major importers of rapeseed meal from India include South Korea, Thailand and Vietnam.
Brighter export prospects come at a time when the government has launched a targeted programme to increase India’s oilseeds output by 46% to 45.65 million tonne by 2022, which will help mills to produce more oil meal with the greater availability of raw material.
India exported 3.5 lakh tonne of oil meals worth Rs 435 crore to China in 2011-12, the year in which it suspended imports of Indian oil meals, citing presence of certain pests.
“China is a big market and there is potential for Indian oil meals exporters. Once the trade resumes, we can easily send a million tonne of oilmeal to the neighbour in a year,” said BV Mehta, executive director of Mumbai-based Solvent Extractors’ Association of India. If Chinese shipments resume at the earliest, overall oil meal exports can cross 4 million tonne in next two years depending on the domestic crop size, he said.
India’s total oil meal exports were 5.5 million tonne valued at Rs 8,361 crore in 2011-12, which fell to a low of 1.5 million tonne in 2015-16. However, due to a rising demand from South Korea and Thailand, oil meals exports have been increasing in the past two years with shipments reaching 3 million tonne in 2017-18.
China is very keen to resume the trade particularly after the dispute with the US as it has imposed additional 25% import duties on many agricultural commodities of American origin from July 6, a member of the delegation said.
According to latest official data, Nafed has over 1.45 million tonne of oilseeds stocks, including rapeseed, groundnut and sunflower.