Limited stocks of soybean meal in India

India has set stock limits on soybean meal from December 23, 2021, to June 30, 2022, in an attempt to control domestic price increases, according to a report by the U.S. Department of Agriculture's Foreign Agricultural Service (USDA).

For plants, millers, and processors, the maximum permitted stock is 90 days of production, based on their daily production capacity. On the other hand, trading companies registered by the government have the right to store soybean meals with a maximum storage limit of 160 tonnes.

The imposition of stock limits will likely prevent hoarding and guarantee product availability for national crushers, according to trade and industry associations. Soybean processors generally do not store soybean meal as a result of high prices.

With domestic soybean production estimated at 11.9 million tonnes, it is unclear how stock limits on soybean meal, as opposed to soybeans, will ensure price correction, the USDA said, and maintain availability for compound feed manufacturers.

“Imposing stock limits on soymeal may reduce crushing, which in turn would lead to higher soybean availability and potentially keep soybean prices in check,” said the USDA.

Domestic prices from September to December 2021 were between $706 and $892 per tonne, compared to the minimum support price of $526 per tonne. During the same period, the price of soybean meal varied from $693 to $799 a tonne.

According to the USDA, a bumper crop in Brazil coming in February 2022 could result in a moderation of world prices. The various poultry industry associations in India have expressed their appreciation for this initiative. Domestic poultry businesses have been hardest hit by higher feed prices.

Reference:

Reidy, S. (2022, May 01). India sets stock limits on soybean meal. Retrieved from https://www.world-grain.com/articles/16306-india-sets-stock-limits-on-soybean-meal