May 19, 2010

Normal monsoon will give India more soymeal output despite huge stocks of 3.2-3.4 million tonnes lying unutilised.

Around this time of the year, stocks should not have been more than one million tonnes. Had stocks been at a reasonable level, my expectation would have been even higher, analysts said.

Rajesh Agrawal, coordinator of the Soybean Processors' Association, said even if some farmers were to switch to other crops such as cotton which offer better returns, good monsoon rains would boost soy output this year.

Good soy harvests in Brazil, Argentina and the US have also dented demand for Indian soymeal, processed from soy and primarily used as cattle and poultry feed.

India mainly exports to countries such as Vietnam, Japan and Indonesia.

"Higher soy output in the country this year would lower prices, making Indian meal more competitive," said Agrawal.

"If rains are normal and crop is good, soymeal exports will be in the normal range of 3.0-3.5 million tonnes in 2010/11, higher than 2009/10 estimates of 2.5 (million tonnes)," Agrawal said.

The country had exported 3.3 million tonnes of soy since September 2009.