Animal feed business to maintain strong margins despite high commodity prices: Nadir B Godrej
«We do expect some bullish factors still to play out like Ramzan, but we are expecting big Latin American soybean oil crops so that will moderate the bullishness,» says Nadir B Godrej, CMD, Godrej Industries.
Let us discuss what has happened in October to November and that is the surge in the palm oil prices. They had surged a bit, but then there has been a bit of a volatility. They have corrected a bit of late as well. What is the sense on the prices going forward? Are they expected to be as volatile or what are the levels that you are watching out for?
Nadir B Godrej: This has been a very unusual situation because palm oil has had a huge premium over soybean oil, which we have not seen in the past. It was always a discounted oil, but it is in high demand nowadays for both biodiesel as well as for speciality fats and that is keeping palm oil at a premium to the other oils. It was even at a premium to rapeseed oil and sunflower oil for a while and a big premium to soybean oil.
We do expect some bullish factors still to play out like Ramzan, but we are expecting big Latin American soybean oil crops so that will moderate the bullishness. And by June, we will see a more normal situation for palm oil where it would not be at a premium over soybean oil. The weather is playing tricks on us. Climate change is causing a lot of disruption in agriculture. So, it is very difficult to predict.
Give us a sense of what the animal feed segment is looking like right now because favourable commodity positions and cost
