|Indian oilmeal exporters concerned about U.S. sanctions against Iran||
Indian exporters exporting oilmeal, used largely as bird and animal feed, have expressed concerns about doing business with Iran, their largest market, after U.S. President Barack Obama reiterated the official American stance of continuing hostilities with the West Asian country.
Last week, Obama declared that the U.S. was still prepared to act militarily to stop Iran from developing nuclear program, despite the decision to pursue a diplomatic deal.
“We have to be careful as far as oilmeal exports to Iran go. We would have to look for alternative markets for future growth,” said Dinesh Shahra, managing director of Ruchi Soya Industries Ltd, the largest oilmeal exporter in India.
Iran, which recently started oilmeal imports from India, has emerged as the largest buyer of Indian oilmeal. Currently, Iran imports over 30 percent of India’s overall oilmeal exports.
Data compiled by the apex trade body, the Solvent Extractors’ Association showed Iran’s import at 472,361 tons of oilmeal between April – August 2013, an increase of 3.55 percent from 456,133 tons in the corresponding period last year. Total oilmeal exports stood at 1,335,695 tons in the first five months of the current financial year compared to 1,482,517 tons in the same period last year, witnessing a decline of 10 percent.
The best advantage Indian exporters enjoy is rupee denominated trade with Iran which may not be possible for new or existing markets elsewhere.
“We will not be utilizing all our rupee debit with Iran as oilmeal exports is minuscule in comparison with crude oil imports from there,” said an exporter.
Meanwhile, Indian exporters have contracted for around half of annual oilmeal exports to take the advantage of rupee depreciation. “We have already signed contacts for 600,000 tons of oilmeal to be extracted from new season crop which is set to be harvested in a month.
According to Shahra, India’s oilmeal exports may hit this year at 4.2 million tons, around same as last year.
India is exploring new markets in South East Asia and the Middle East for oilmeal exports.
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