January 13, 2009
India soy output may miss forecast on lower yield
Soy production in India, Asia's biggest supplier of soymeal used in animal feed, may miss the November forecast due to lower yields in some key growing regions, according to industry officials.
Output in the year started October 1 may total 9 million tonnes, less than the 9.89 million tonnes estimated by the industry according to, B.V. Mehta, executive director of the Solvent Extractors' Association.
Lower yield may fetter India's plans to increase exports of the animal feed ingredient to a record for a second year and help support a rally in soy meal prices in the Chicago Board of Trade. The South Asian nation competes with the US, Argentina and Brazil in the feed market of Vietnam, Japan and South Korea.
Rajesh Agrawal, a spokesman for the Soy Processors Association of India said rising prices in the past two months may encourage farmers to hold back some of the produce, paring supply to the domestic market.
Soymeal for March delivery went up as much as 1.2 percent to US$297.90 a tonne in after-hours electronic trading on the Chicago Board of Trade. Prices are up 19 percent in the past three months.
Indian farmers sold as much as 25 percent less in the market since October 1 from a year-ago period, Agrawal said.
That's an indication the crop size may be smaller than estimated, according to Dinesh Shahra, managing director of Ruchi Soya Industries Ltd., India's biggest soy processor. Shahra said it would three-to-four weeks to put a figure on the size.
India's soy farms yielded 9.46 million tonnes a year earlier and the Central Organization for Oil Trade and Industry, the biggest group of oilseed processors, estimate this year's crop at 9.98 million tonnes, than the 10.8 million tonnes predicted by the Soy Processors Association.
Soymeal exports were little changed at 1.5 million tonnes in the December quarter, compared with a growth of more than 70 percent in the previous two quarters, Extractor's Mehta said.
India, which grows non-genetically modified soy, sells more than 70 percent of its animal feed production abroad.
Soy traded on India's National Commodity & Derivatives Exchange Ltd. have advanced 31 percent in the past two months on expectation crops in Brazil and Argentina may be smaller in the absence of adequate rains.
Shahra said the bullishness about a lower Latin American crop may last a while.
High temperatures and lack of rain in Argentina have hurt corn crops and delayed farmers' plans to sow soy, lowering potential yields, a government weather forecaster said Jan. 9.
Argentina is the second-largest exporter of corn after the US.
