Transcript PRESENTATION NAME

PERSONA OF
‘CRUSHING S&D’
IN FEED INDUSTRY
Presented by :
Atul Mundhra & Associates, Indore
AGROFEEDS
(93013 38000, 98260 38000)
Atul Mundhra & Associates, Indore
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INDIAN SOYMEAL
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Soybean consists mostly of protein-rich meal;
about 85 percent of the world’s soybeans are
processed, or crushed, annually into soybean
meal and oil.
Approximately 98 percent of the soybean meal
that is crushed is further processed into animal
feed with the balance used to make soy flour
and proteins.
Of the oil fraction, 95 percent is consumed as
edible oil; the rest is used for industrial
products such as fatty acids, soaps and biodiesel.
Indian Soymeal is 100 % non GMO product
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INDIAN SOYMEAL
Cont.....
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It is accepted in more than 60 countries
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Indian Soya industry produces approx 75
lac tons (LT) soyameal annually
Out of which exports account for 42 LT &
domestic consumption of 33 LT
Soymeal Ratio of domestic consumption
with respect to overall exports accounts for
approx 78 % which retains a high impact
over crushing statistics
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ABOUT INDIAN SOY INDUSTRY
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India has been producing more than 11 million tons of soybean
annually for last 2 years out of which around 10 million tons are
crushed for meal & oil extractions
India is 5th largest Soya producer of the world after US, Brazil,
Argentina & China
India is also 4th largest exporter of Soymeal in the World after
Argentina, Brazil & US
There are more than 100 Soya processors spread in MP,
Maharashtra, Rajasthan, CG, Gujrat, UP, AP, Karnataka & TN
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ABOUT INDIAN SOY INDUSTRY
Cont......
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Top 5 Processors of country are crushing 42 % of total crop
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Almost 98% crop is produced in six states of India i.e. MP, MH,
Raj, CG, AP & Karnataka
Indian poultry & compound feed industry spread across the
country is growing @ 10 % p.a. with consistent round the year
demand
India is a second largest country of population having increasing
edible oil demand every year that means increased crush for oil
will provide more soybean meal for feed.
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S&D Follows
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FACTORS AFFECTING SOYMEAL PRICES
• The crush margin & parities between meal, oil and seed
• Weather at the time of Soya crop production at all
producing centers, domestic and international
• Exchange rate (USD/INR)
• Government policies such as Minimum Support Price
(MSP) fixed for the seed, import duty on oil & export
incentives on meal and stock limits
• Price of the soybean against that of competitive crops
used for Feed Industries, viz., Maize, Jowar, Bajra &
other oil meals
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FACTORS AFFECTING SOYMEAL PRICES
Cont…..
• Disease affecting poultry and cattle like bird flu
• Demand of Soymeal from Foreign Countries and
Domestic Poultry & feed Industry
• International soy price movement at CBOT, being the
major international reference market
• Any other natural calamities beyond the control of
human being
• Forecast of Soya production around the world through
USDA monthly Report
• Shipping freight & logistic operations
Atul Mundhra & Associates, Indore
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FINDINGS OF S&D
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At present there is no mechanism for price discovery of
meal in India other than export base transaction
In off season, i.e. April to September when export demand
remains less then 25% then industry has no organized base
to discover true price
In absence of price discovery mechanism, industry or users
are required to refer nearby crushing S&D for further price
movement
In the event of disconnection of international price
reference & geographical shortage of meal across India, one
will be in need to refer monthly S&D to determine the steps
ahead
Atul Mundhra & Associates, Indore
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FINDINGS OF S&D
Cont…..
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In a particular month if domestic demand remains more
than 60 % of the total then price of the meal is driven
through domestic feed market
There has been general tendency of Feed industry to buy
meal on short term basis & in that case if availability
remains weak then industry goes to pay abnormal high
price & abnormal logistic cost to secure meal
Now-a-days Indian soy industry is running at the same
model of brazil soy industry wherein six months supply is
oriented to export & another six month to cater domestic
demand & discover the price respectively
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CONCLUSION
(How Important is Crushing S&D for Feed Industry)
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To change the buying pattern on deferred window mechanism (like
export contracts)
Should hedge the raw material (Meal) through physical forward
contracts rather to opt secondary market (E-trade) as a tool because
contract of secondary market settles at the price of Central region basis
To refer nearby crushing S&D on regular basis to keep the price on track
in view of unsystamtic geographical distribution of soymeal
To avoid abnormal logistic cost one should keep track of nearest
crushing capacities
Tie-up with crushing plants is one of the solution for securing raw
material because most of the Soybean stock remain with few crushing
players & that wil shift the bargain power from feed industry to
crushing industry even in export off
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Thank You…
Presented on : 11th April 2013
At : Khajuraho (Madhya Pradesh)
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