ITOD Project- Soybean (HS Code-1201)Identify opportunities for export of Soybean

09-Mar-15

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Group Members:

1) Chaitanya Patil (13C)2) Roopam Agarwal (41C)3) Sameer Dubey (44C)

Table of Contents

1. About Soybean …………………………………………………………………………………….. 3

2. Varieties of Soybean ………………………………………………………………………………. 3

3. Export-Import Statistics ………………………………………………………………………….. 6

3 a) FOB value for Export from Nhava Sheva Port …………………………………………. 6

3 b) FOB value for Export from Mundra Port ………………………………………………. 6

3 c) Comparative Analysis ……………………………….…………………………………….. 7

3 d) Top 5 Exporters of Soybean in terms of % ……………………………………………… 7

3 e) Top 5 Exporters of Soybean in terms of value …………………………………………… 7

3 f) % Share in India’s total exports of Soybean over the years …………………………….. 8

3 g) Top importers of Soybean in year 2013 ………………………………………………….. 8

3 h) Top 5 importers to China …………………………………………………………………. 8

3 i) India’s Export to Top 5 countries by value ………………………………………………. 9

3 j) Export Incentives for Export of Soybean from India …………………………………… 9

4. State Wise Production of Soybean In India for 2012-13 ………………………………………. 10

5. Sanitary and Phyto-Sanitary Standards …………………………………………………………10

6. Marketing constraints and remedial measures ………………………………………………… 10

7. Institutional Facilities …………………………………………………………………………...... 11

8. Export Analysis for ASEAN countries ………………………………………………………….. 14

9. ASEAN Countries – Supply Demand Scenario ………………………………………………… 14

10. Competitive Analysis for Export in ASEAN countries based on tariffs …………………….. 16

11. Recommendations ………………………………………………………………………………. 17

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About Soybean:

Soybean is also known as the “Golden Bean” of the 20th century. Though Soybean is a legume crop it is widely used as oilseed. Due to very poor cookability and digestibility on account of inherent presence of Trypsin inhibitor, it cannot be used as a pulse. It is now the second largest oilseed after groundnut. It grows in varied agro climatic conditions. It has emerged as one of the important commercial crops in many countries. Several countries such as Japan, China, Philippines, Indonesia, European and Middle East countries are importing Soybean to supplement their domestic requirement for human consumption and cattle feed.

Soybean has great potential as an exceptionally nutritive and very rich protein food. It can supply the much needed protein to human diets, because it contains above 40 per cent protein of superior quality and all the essential amino acids particularly glycine, tryptophan and lysine, similar to cow’s milk and animal proteins. Soybean also contains about 20 per cent oil with an important fatty acid, lecithin and Vitamin A and D. The 4 percent mineral salts of Soybeans are fairly rich in phosphorous and calcium.

Major Constituents of Soybean:

Contents Percentage

Proteins 40Carbohydrates 30

Fibre 05Lecithins 0.5Saponins 04

Oil 18-20

Varieties of Soybean:

State wise major Commercial varieties:

States VarietiesEarly (<95 days) Medium (96-105 days) Late (>105 days)

Madhya Pradesh JS 20-34, JS 95-60, JS 93-05, Ahilya-3 (NRC 7)

JS 20-29, JS 335, Ahilya-4 (NRC 37), JS 97-52, RVS 2001-4, MAUS 81,

Maharashtra (North) JS 20-34, JS 93-05 JS 20-29, JS 335, NRC 37, JS 97-52, MAUS 158, Phule Kalyani, MAUS 81, MAUS 71

Maharashtra (South) MACS-450, RKS 18 (Pratap Soya 2),

MACS-1188, Phule Kalyani, Pratikar (MAUS 61), MAUS 71,

Rajasthan JS 20-34, JS 93-05 JS 20-29, JS 335, NRC 37, JS 97-52, Pratap Soya 45 (RKS 45), RKS 24, MAUS

Gujarat JS 20-34, JS 93-05 JS 20-29, JS 335, NRC 37, JS 97-52, MAUS 81

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Karnataka JS 93-05, DSb-1, RKS 18 (Pratap Soya 2), MACS-450,

MACS-1188, Pratikar (MAUS 61)

Andhra Pradesh RKS 18 (Pratap Soya 2), LSb 1, MACS-450,

MACS-1188, Pratikar (MAUS 61)

Punjab SL 744, SL 525, SL 688, PS 1347, Pusa 98-14, Pusa 97-12, Pant Soybean 1042

Uttar Pradesh SL 688, PS 1347, SL 525, Pusa 98-14, Pusa 97-12, Pant Soybean 1092, Pant Soybean 1042

Haryana PS 1225, SL 688, PS 1347, SL 525, Pusa 98-14, Pusa 97-12, Pant Soybean 1042

Uttarakhand Pant Soybean-19 (PS 1368), VL Soya65, PS 1225, VL Soya 63,

Himachal Pradesh VL Soya 63, VL Soya 59, Palam soya, VL Soya –47

North Eastern Zone (Assam , Manipur, Meghalaya, Arunachal Pradesh, Tripura, Sikkim, Jharkhand)

RKS 18 (Pratap Soya 2)

JS 97-52, Pratap Soya 1 (RAUS 5),

AGMARK Grade Standards for Soybean (Soybeans Grading and Marking Rules, 2012)

Designation Extran Split cracked seed % by mass (Max)

Immature,shriveled andgreenseedspercentby mass(max.)

Damaged andWeevilledseedspercentbymass(max.)

Otheredibleseedspercent bymass (max.)

Moisture,percent bymass(max.)

Oilcontent,percentbymasson drybasis(Min.)

Colour ofextracted oil onlovibondscaleexpressed as(Y+10R)in 1/16”cell

Organicpercentby mass(max.)

*Inorganic,percentby mass(max.)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)Special 0.10 0.10 2.0 2.0 Nil Nil 7.0 20.0 20.0Standard 0.50 0.25 3.0 3.0 0.5 0.5 9.0 18.0 30.0General 0.75 0.25 4.0 7.0 2.0 1.0 12.0 15.0 40.0

* Impurities of animal origin shall not exceed 0.10%.Note. - The total of column (2) to (7) shall not exceed 11% in General grade.

As per SOPA the Specification of SBM are as under:

Protein               -    Min. 46%

Oil                      -    Max.  1.50%

Fiber                   -    Max. 6%

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Sl .No. Pesticides MRL ( Mg / Kg.)1. Azinphos-methyl MRL 0.05*2. Carbaryl MRL 13. Diquat MRL 0.24. Fenitrothion MRL 0.15. Paraquat MRL 0.16. Parathion MRL 0.05*7. Carbondazim MRL 0.28. Fenamiphos MRL 0.05*9. Methamyl MRL 0.0210. Acephate MRL 0.5

Moisture            -   Max. 12%

Sand/Silica         -   Max. 2%

Urease Activity  -   0.30 Unit Max. (Mg/N.G/Min) at 30 Degree Centigrade by EEC Method

Free from lumps & foreign material other than soya.

Maximum residue limits for pesticides as per Codex for Soybean (dry)

Prices of different grades of Soybean in major Mandis of India:

Mandi(Market) Name

Per Quintal in INR

Per ton in INR

Per ton in USD

Average prices in MP of (10-2-2-7) grade

Indore (10-2-2-7) 3418 34180 551.29 549.84Bhopal (10-2-2-7) 3400 34000 548.39

       Average prices in MP of (J.S.335) grade

Ujjain (J.S.335) 3564 35640 574.84 574.84

       

Average prices in Maharashtra of (10-2-2-7) grade

Nagpur (10-2-2-7) 3400 34000 548.39 548.39

       

Average prices in Rajashthan of (10-2-2-7) grade

Kota (10-2-2-7) 3295 32950 531.45 531.45

       Average prices in Maharashtra of Yellow grade

Latur (Yellow) 3385 33850 545.97 545.97 1 USD = 62 INR; Forex convertion

Source: CMIE.org

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Export-Import Statistics:

FOB value for Export from Nhava Sheva Port:

Particulars

Madhya Pradesh Maharashtra Rajasthan Maharashtra

RemarksIndore (Grade 10-2-2-

7)

Ujjain (Grade - J.S.335)

Nagpur (Grade 10-2-

2-7)

Kota (Grade 10-2-2-7)

Latur (Yellow)

Assumed Price for Calculation (USD/Metric Ton)

549.8 574.8 548.4 531.5 546.0 

Assumed Price for Calculation (USD/Container) 12096.5 12646.5 12064.5 11691.9 12011.3

 A 20' container is assumed to contain 22 tonnes of weight

Inland Haulage Charges/Local transportation 121.0 129.0 137.1 145.2 74.2

Custom Clearance & documentation Charges 165.5 165.5 165.5 165.5 165.5

This includes documentation fee, custom charges, bill of lading (per shipment), attendance agency (FCL), Fumigation

Terminal Handling Charges 102.2 102.2 102.2 102.2 102.2  

Total (USD/ container) 13035.0 13618.0 13017.7 12636.3 12899.2  

FOB value for Export from Mundra Port:

Particulars

Madhya Pradesh Maharashtra Rajasthan Maharashtr

aRemarksIndore

(Grade 10-2-2-7)

Ujjain (Grade - J.S.335)

Nagpur (Grade 10-2-

2-7)

Kota (Grade 10-2-2-7)

Latur (Yellow)

Assumed Price for Calculation (USD/Met Ton)

549.8 574.8 548.4 531.5 546.0

Assumed Price for Calculation (USD/Container)

12096.5 12646.5 12064.5 11691.9 12011.3

A 20' container is assumed to contain 22 tonnes of weight

Inland Haulage Charges/Local transportation

166.1 166.1 177.4 166.1 177.4

Custom Clearance & documentation Charges 165.5 165.5 165.5 165.5 165.5

This includes documentation fee, custom charges, BoL (per shipment), attendance agency (FCL), Fumigation

Terminal Handling Charges 97.4 97.4 97.4 97.4 97.4

Total (USD/ container) 13075.3 13650.3 13053.2 12652.4 12997.5

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Comparative Analysis after doing calculations for FOB value for Export of Soybean:

Port

Madhya Pradesh Maharashtra Rajashthan MaharashtraIndore

(Grade 10-2-2-7)

Ujjain (Grade - J.S.335)

Nagpur (Grade 10-2-2-7)

Kota (Grade 10-2-2-7) Latur (Yellow)

Nhava Sheva (per ton) 592.5 619.0 591.7 574.4 586.3Mundra (per ton) 594.3 620.5 593.3 575.1 590.8

*Prices are in USD/Ton

Top 5 Exporters of Soybean in terms of %

Brazil 39.8%

USA 37.6%

Argentina 7.1%

Paraguay 4.4%

Canada 3.3%

Others 7.8%

39.8%

37.6%

7.1%4.4%

3.3% 7.8%% Share of Top 5 Exporters (2013)

Brazil USA Argentina Paraguay Canada Others

Top 5 Exporters of Soybean in terms of Value

Country 2009 2010 2011 2012 2013

Brazil 11424.28 11043 16327.29 17248.32 22810.05

USA 16475.85 18586.27 17563.87 24741.58 21494.19

Argentina 1675.49 4986.277 5457.164 3191.609 4089.403

Paraguay 787.159 1581.435 2286.44 1576.649 2509.104

Canada 964.975 1368.353 1444.046 2170.776 1893.191

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2009 2010 2011 2012 20130

5000

10000

15000

20000

25000

Top 5 Export Countries (By Value)

Brazil USA ArgentinaParaguay Canada

% Share in India’s total exports of Soybean over the years:

  2009 2010 2011 2012 2013USA 13.1 28.8 16.2 15.3 46.6Canada 3.7 43.9 38.2 23.9 18.4Nepal 2.1 6.4 3.7 8.8 11.7France 0 0 0.3 7.4 6.2Belgium 0 0 0 4 3.9Others 81.1 20.9 41.6 40.6 13.2

2009 2010 2011 2012 20130%

10%20%30%40%50%60%70%80%90%

100%

% Share in India's Total Exports

USA Canada Nepal France Belgium Others

Top Importers of Soybean in the year 2013:

China 60.8%

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Germany 3.4%

Mexico 3.3%Spain 3.1%

Japan 3.0%Others 26.4%

60.8%

3.4%3.3%

3.1%3.0%

26.4%

% of Total World Imports (By value 2013)

ChinaGermanyMexicoSpainJapanOthers

Top 5 Exporters to China:

  2009 2010 2011 2012 2013

Brazil 7350.347 8148.318 11790.24 14260.03 19132.07

USA 9333.095 11328.52 12578.64 15381.23 13290.2

Argentina 1649.645 4980.288 4329.313 3685.113 3658.625

Uruguay 320.706 601.356 807.526 1212.451 1391.579

Canada 131.226 34.627 219.068 401.958 498.198

2009 2010 2011 2012 20130

5000

10000

15000

20000Top 5 Export Countries for China

Brazil United States of AmericaArgentina UruguayCanada

India’s Export to Top 5 countries by value:

  2009 2010 2011 2012 2013

USA 2799 2199 3014 5094 39581

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Canada 798 3357 7102 7932 15593Nepal 450 491 688 2914 9910France 5 3 55 2452 5254Belgium 5 3 3 1326 3308World 21313 7640 18578 33243 84922

2009

2010

2011

2012

2013

0 5000 10000 15000 20000 25000 30000 35000 40000

Export for Top 5 Countries (By Value)

Belgium France Nepal Canada USA

Export Incentives for Export of Soybean from India:

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State Wise Production of Soybean In India for 2012-13 Total India Production 14,666.40 Madhya Pradesh 7,800.10 Maharashtra 4,670.80 Rajasthan 1,468.60 Karnataka 178 Chhattisgarh 128.1 Gujarat 47 Uttarakhand 20.9 Uttar Pradesh 19 Himachal Pradesh 0.9 Jharkhand 0.9 West Bengal 0.5 Odisha 0.2

In ‘000 Tonnes The three states Maharashtra, MP, Rajasthan account for about 95.04% of total Soybean production in India

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Other common export incentivesSingle window

system for export All agricultural exports, involves creation of multi-functional nodal agencies

reduces transaction and handling costs significantly

Tax exemptions All exports VAT, H-forms (Sales tax), and excise

Tax Concessions Firms producing and exporting from Special Economic Zones

100% for first 5 years50% for the next 2 years

Vishesh Krishi and Gram Udyog Yojna (VKGUY)

More than 2000 products including Soya

Benefits @ 5% of FOB value of exports to all marketsIncremental

Exports Incentivization Scheme

IEC holder, admissible only if incremental growth achieved compared to previous year

2% on the incremental growth compared to the previous year

SCHEME

VALIDITY BENEFITS

Sanitary and Phyto-Sanitary Standards:

The Sanitary and phytosanitary (SPS) measures are an integral part of export trade as per agreement made under GATT (General Agreement on Trade and Tariffs), 1994. As per provisions made under this agreement, the standards framed should be such that the minimum level of protection required by an importing country may be fulfilled.

The Soybean, which is rich in protein as well as fat is vulnerable to infestation by insects, mites and if contains more moisture makes it prone to the infection by fungi.

Soybean should be dried to reduce its moisture content preferably below 9 percent before packing. Soybean should be packed in clean, dry, sound single hessian bags.

In case, infestation occurs, fumigation should be done with Aluminum Phosphates, at prescribed dosage. In no case, ‘Methyl Bromide’ should be used, as the commodity is rich in oil content. Regular inspection of stocks to check health of the seed and regular prophylactic treatment should be provided with the approved chemicals.

Marketing constraints and remedial measures:

1) The co-operative agencies have done a commendable job in Madhya Pradesh and Uttar Pradesh for marketing of Soybean. In other states, these agencies should also come forward to improve the marketing system of Soybean.

2) The consumers and processors prefer yellow variety of Soybean for which a higher premium prevails. The cake obtained from yellow variety also gets a higher price. Therefore, the development agencies must popularize high yielding yellow variety Soybean and discourage black variety of Soybean.

3) At present, the Soybean meal/cake is exported outside the country. This cheap source of protein can solve the problem of caloric malnutrition in the country. The existing Soybean solvent extraction plants can produce Soybean fat for human consumption by installing additional equipment and improving the hygienic conditions.

4) There is a good scope for small units manufacturing protein rich food products from Soybean. Such agro-based industries may help the cultivators to improve their economic conditions and provide protein rich Soybean products. Therefore, Government should encourage incentives for soy based agro industries.

5) Soybean has not entered in to the general food habits of the common people of the country. Therefore, there is strong need to launch consumer awareness program in order to popularize various soy products.

6) There is lack of adequate scientific storage facilities in the villages. The present storage facilities are available mainly in the urban areas. Farmers should build rural godowns under the centrally sponsored ‘Gramin Bhandaran Yojana’ availing subsidy and benefit from the scheme.

7) The grade specifications formulated by Directorate of Marketing and Inspection should be popularized among the farmers, traders and processors. Grading at producers’ level should also be encouraged.

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8) There is no proper and adequate market intelligence system for Soybean in the states as in Madhya Pradesh where I.T.C. (Indian Tobacco Company) has established its I.T. (Information Technology) based market intelligence system and succeeded in revolutionizing e-commerce as a pioneering effort to set an example for others.

Institutional Facilities: (Marketing related facilities of Government and Co-operative facilities)

Scheme and Name of organisation

Facilities

1.Agmark grading Directorate of Marketing and Inspection (D.M.I.)

Head Office, N.H.-IV,

Faridabad

²² Promotion of grading of agricultural and allied commodities under Agricultural Produce (Grading & Marking) Act.1937.

²² Agmark specifications for agricultural commodities have been framed, based on their intrinsic quality. Food safety factors are being incorporated in the standards to compete in world trade. Standards are being harmonised with international standards keeping in view the WTO requirements. Certification of agricultural commodities is carried out for the benefit of consumers and producers.

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2.Gramin bhandaran yojana (Rural godown scheme)

Directorate of Marketing and Inspection.

Head Office, N.H.-IV,

Faridabad

²² It is a capital investment subsidy scheme for construction/renovation/expansion of rural godowns. The scheme is implemented by DMI in collaboration with NABARD and NCDC. The objectives of the scheme are to create scientific storage capacity with allied facilities in rural areas to meet the requirements of farmers for storing farm produce, processed farm produce, consumer articles and agricultural inputs.

²² To prevent distress sale immediately after harvest.

²² To promote grading and quality control of agricultural produce to improve their marketability.

²² To promote pledge financing and marketing credit to strengthen agricultural marketing in the country for the introduction of a national system of warehouse receipt in respect of agricultural commodities stored in such godowns.

²² The entrepreneur will be free to construct godown at any place and of any size except for restrictions that it would be outside the limits of Municipal Corporation area and be of a minimum capacity of 100 MT.

²² The scheme provides credit linked back-ended capital investment subsidy @25 percent of the project cost with a ceiling of Rs. 37.50 lakh per project. For the projects in

North-Eastern states and hilly areas with altitude of more than 1000 m above mean sea level and SC/ST entrepreneurs, maximum subsidy admissible is @ 33 percent of the project cost, with a ceiling of Rs. 50.00 lakh.3.Price support Scheme

National Agricultural

Co-operative Marketing

Federation Ltd. (NAFED).

►Procurement of oilseeds including Soybean under the price support scheme when market price is ruling at or below the declared support price for a particular year.

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Institutional Facilities for availing Credit:

Name of scheme Eligibility Facility1. Produce

Marketing Loan Scheme

All the categories of farmers i.e., small / marginal / others are eligible.

This type of loan is given upto Rs. 1 lakh against pledge /hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 6 months.

2. Kishan Credit

Card Scheme

All types of agricultural clients having good track record for last two years are eligible.

Kissan credit card is valid for 3 years through which the barrower / farmer meet his production and other contingency needs by using easy convenient withdrawal slips. The minimum credit limit is Rs.3000/- and is based on operational landholding, cropping pattern and scale of finance.

3. Credit Schemes of Nationalised Banks

For different categories of farmers

Provide credit for construction of godowns, agri-business, contract farming, agro processing etc.

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Export Analysis for ASEAN countries:

Items 2013 2014 Change

  Quantity %

Supply (Million tons) 7.82 7.94 0.12 1.53

Beginning stock 1.06 1.01 -0.05 -4.72

Production 1.44 1.46 0.02 1.39

Import 5.32 5.47 0.15 2.82

Demand (Million tons) 7.82 7.94 0.12 1.53

Domestic utilization 6.67 6.80 0.13 1.95

Export 0.15 0.15 0.00 0.00

Ending stock 1.01 0.99 -0.02 -1.98

Ratio of production to domestic utilization (%) 21.58 21.48 -0.10 -

Ratio of beginning stock to domestic utilization (%) 15.97 14.79 -1.18 -

*Source: ASEAN Agricultural Commodity Outlook, December 2013

Ratio of Production to Domestic Utilization has decreased by 0.10 million tons Ratio of beginning stock to domestic utilization has decreased due to rise in domestic

consumption and less beginning stock. Increase in domestic consumption has caused import in ASEAN countries to increase by

about 2.82%

ASEAN Countries – Supply Demand Scenario

Country Supply Demand

  Beginning Stock

Production

Imports Total Domestic Utilization

Exports Ending stock

Total

ASEAN 1,005,936 1,461,259 5,469,184 7,936,38 6,802,649 147,540 986,191 7,936,380

0

Brunei n.a - 604 604 604 - n.a. 604

Cambodia 842 140,000 - 140,842 29,576 110,281 985 140,842

Indonesia 690,190 822,385 1,206,3372,718,91

2 2,045,248 8,683 664,981 2,718,912

Lao PDR 6,772 23,000 10 29,782 17,786 4980 7,016 29,782

Malaysia - 600000 600,000 580,000 20,000 - 600000

Myanmar - 239,075 - 239,075 238,775 300 - 239,075

Philippines n.a 639 60,000 60,639 60,639 n.a. n.a. 60,639

Singapore - - 20,000 20,000 20,000 - - 20,000

Thailand 159,751 70,220 2,257,8002,487,77

1 2,322,428 2,000 163,343 2,487,771

Vietnam 148,381 165,940 1,324,4331,638,75

4 1,487,593 1296 149,865 1,638,754

ASEAN countries majorly imports from the world. Indonesia is major producer followed by Malaysia, Myanmar and Vietnam. Major imports are Indonesia, Thailand and Vietnam.

ASEAN Countries Supply-Demand Scenario

Indonesia

Imports merely 23,000 tons from ASEAN countries, rest it imports 98% of importing quantity from outside ASEAN countries in 2013. Majorly Non-GM soya.

US has captured whole market by more than 95% of total import.

Malaysia

Majorly, 99% of imports from outside ASEAN countries in 2013. Majorly Non-GM soya. Major importers are US, Brazil, Canada, Paraguay and Argentina.

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Philippines

Majorly, 99% of imports from outside ASEAN countries in 2013. Majorly Non-GM soya. US and Canada have captured market by more than 85% of total import.

Singapore

Majorly, 99% of imports from outside ASEAN countries in 2013. Majorly Non-GM soya. Canada has captured market by more than 78% of total import.

Thailand

Majorly, 99% of imports from outside ASEAN countries in 2013. Majorly Non-GM soya. Brazil has captured market by more than 65% of total import, followed by US.

Vietnam

Majorly, 99% of imports from outside ASEAN countries in 2013. Majorly Non-GM soya. US and Brazil have equal share of 43% each of total import.

Competitive Analysis for Export in ASEAN countries based on tariffs:

Product Philippines Viet Nam Malaysia Singapore Advantage country

120100 1% tariff 0% tariff 0% tariff 0% tariff Non-gm crop consumption

120190 1% tariff 0% tariff 0% tariff 0% tariff Non-gm crop consumption

120810 2.84% tariff 8% tariff 0% tariff 0% tariff Malaysia, Singapore

230400 1% tariff 0% tariff 0% tariff 0% tariffDisadvantage due to high prices in recent month

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Sources: TradeMap – ITC – WTO| ASEAN Agricultural Commodity Outlook :page no. 54-61, December 2013| Indonesia- US import

Philippines

Viet Nam Malaysia Singapore0

100000200000300000400000500000600000700000 649000

19200096000 70000

India's Export to ASEAN countries in 2013

Export value in (USD)

Philippines Viet Nam Malaysia Singapore0

200400600800

10001200

672 703 711

972

India's Export to ASEAN countries in 2013

value/ton (USD)

India signed FTA agreement with ASEAN in 2007. The decision had been taken to lower down import tariffs gradually. However, India’s soybean export has not been benefited much.

Recommendations:

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