Indian traders, for the first time since 2021, recently canceled 25,000 tons of soybean meal (SBM) export contracts and booked 80,000 tons of imports from African countries after a sharp rise in domestic prices redirected trade flows, trade sources said.
The cancellations are likely to help SBM suppliers in the Americas increase supplies to Asian buyers, who traditionally source their product from India. India’s soybean purchases also allow African exporters to sell the oilseed at a significant premium to global benchmark prices, Reuters reported.
The sharp jump in domestic soybean prices has driven up the cost of SBM, making it difficult for traders to fulfill export commitments, said two international trading company officials, who declined to be identified because they were not authorized to speak to the media.
“Sellers were unable to absorb the USD 200/ton price increase, so they mutually terminated contracts for May and June deliveries with buyers,” one source said.
Order cancellations, or previously unreported contract cancellations, are rare in the SBM trade, as sharp price fluctuations are relatively uncommon. The contract cancellations did not result in penalties.
Local SBM prices jumped 41% in a month, reaching USD 686.26/ton, the highest in four years, amid tight supplies due to declining soybean production.
Sources said the price increase pushed Indian SBM export offers for June shipments to around USD 695/ton FOB, up from around USD 475 a month earlier.
India is not receiving new orders for SBM exports due to inflated prices, forcing traders to increase imports from African countries, said Vinod Jain, founder of agricultural exporter Suraj Impex.
According to Mr Jain, India’s soybean imports could reach a record 800,000 tons in the year ending September 2026. According to data compiled by the Soybean Processors Association of India, India imported around 2,000 tons last year.
India only allows imports of non-GMO soybeans, limiting supplies to a few African countries, including Benin, Niger, Togo, and Nigeria, where non-GMO soybeans are significantly more expensive than GMO varieties.
This month, traders purchased African soybeans at prices ranging from USD 700 to USD 760 per ton, including cost, insurance, and freight, for shipments to India in June and July, according to Manoj Agrawal, Managing Director of Maharashtra Oil Extractions, a SBM producer and exporter.
According to one source, traders purchased at least 80,000 tons of soybeans this month, and purchases are continuing as local soybean prices remain stable.
The soybean shortage is expected to persist until the start of the new season in September and October, prompting traders to import from African countries, said Ashok Bhutada, a soybean processor in Latur, Maharashtra.