Pakistan expands soybean
imports
Pakistan appears to be on its
way to altering its import mix of oilseeds and meals. The
increase in the import tariff on soybean meal from zero to
11% during the last year and 10% this year, leading to a
total 21% effective from July 1, is generally expected to
reduce soybean meal imports with higher imports of soybeans.
Pakistan continues to expand its
imports of soybeans, importing a record of more than 500,000
tonnes in 2014-15, with projected 2015-16 imports of 1.5
million tonnes, the U.S. Department of Agriculture (USDA)
Foreign Agricultural Service (FAS) reported on Nov. 4.
In addition to a tariff that now favors soybean imports over
soymeal imports, a growing and modernizing domestic poultry
sector, lower rapeseed imports, lower cotton production, and
adequate crushing capacity are expected to support larger
soybean imports.
Imports of soybean meal are expected to drop from 1 million
tonnes to 700,000 tonnes in 2015-16.
Pakistan appears to be on its way to altering its import mix
of oilseeds and meals.
The increase in the import
tariff on soybean meal from zero to 11% during the last year
and 10% this year, leading to a total 21% effective from
July 1, is generally expected to reduce soybean meal imports
with higher imports of soybeans.
Surprisingly, despite the
higher tariff, exports of soybean meal to Pakistan were
stronger than expected, rising to just over 1 million tonnes
in 2014-15.
To some degree, stronger than expected post-July imports
were due to pre-existing forward purchases and import
contracts.
Exports of soybeans to
Pakistan reached a record 540,000 tonnes in 2014-15
according to exporter data.
The report says that, looking forward, the ratio of soybean
meal to soybean imports is expected to continue to tilt in
favor of soybeans.
Importers are lining up their
supplies for 2015-16 and have reportedly contracted for at
least 500,000 tonnes of soybeans for the first six months of
the marketing year.
At this stage, it does not appear that deals have been
struck for 2015-16 soybean meal from the Western Hemisphere.
There is always potential for
soybean meal imports from India. Much will depend on the
relative advantages of lower freight costs, shorter shipping
times, and smaller shipments from nearby India.
Importers and feed
compounders have much to consider when weighing the price
benefits of soybeans vs.
soybean meal and India vs. Western Hemisphere suppliers.
However, as long as the
current duty structure is in place, soybeans are expected to
comprise an increasingly large share of soy complex imports.
Lower 2015-16 cotton production is also expected to support
additional imports of soybeans.
Pakistan is also expected to export a small quantity of
soybean meal in 2015-16. Currently, sources suggest that Sri
Lanka may become a customer for soybean meal produced in
Pakistan.
Total supplies of rapeseed and sunflower seed are lower than
currently estimated, chiefly because production is estimated
below current USDA estimates, the report said.
Lower production of these two oilseeds, coupled with slight
reductions in imports in 2014-15, suggest that supplies of
oilseed meals from these crops are well below previous
estimates, lending additional support for increased demand
for soybeans.
Additionally, favorable palm oil pricing is expected to curb
demand for rapeseed given its high oil content and less
efficacious meal.
Purchases of rapeseed through
the first four months of the 2015-16 marketing year are
estimated at 150,000 tonnes.
November, 2015
By:
Staff Report
Source: World Grain