Pakistan expands soybean import

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.Join us on FacebookSurprisingly, 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 2015-16and 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.Join us on TwitterThere 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 inplace, 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 arelower 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, 2015By:Staff ReportSource:World Grain