Those restrictions began on December 23, 2021 and will run through to June 30, 2022.
However, the author of a USDA FAS report on the development said it remains unclear how stock limits on soymeal, as opposed to soybeans, will ensure price correction, and maintain availability for compound feed manufacturers.
“According to trade and industry associations, imposing stock limits on soybeans would likely prevent hoarding and ensured product availability for domestic crushers. Soybean processors do not typically stock soymeal, however, largely due to high price economics, and that the product does not maintain a long storage life within India.
“Imposing stock limits on soymeal may reduce crushing, which in turn would lead to higher soybean availability and potentially keep soybean prices in check.”
Poultry sector back ministry's action
India’s various poultry industry associations have welcomed the move though.
The country’s poultry companies have been the most affected by rising animal feed prices, and, in August 2021, the sector successfully advocated that the Indian government import genetically engineered (GE)-origin soymeal to ease feed supply challenges, a move which was not extended, though, due to pressure from domestic soybean stakeholders.
In a similar move, late last month, the Securities and Exchange Board of India, barred commodity exchanges from launching new futures contracts for seven commodities, including soybean and its derivatives. The initiative is aimed at curbing rising food inflation.
From September-December 2021, domestic soybean prices in India ranged between $706-$892 per metric ton (MT) against the minimum support price of $526/MT. In the same period, soymeal prices ranged between $693-$799/MT, found the USDA report.
A bumper crop in Brazil arriving in February 2022 may result in global price moderation, it noted.