September 23, 2010

Indian soy crop may reach record amid moderate rainfalls

Soy output in India, Asia's top supplier of animal feed made from the oilseed, may increase to a record as above-normal rainfall lifts yields, according to traders.

Production may exceed 10 million tonnes in the year starting October 1. Soymeal exports will top 4 million tonnes next year, with shipments reaching 2 million tonnes in the four months ending January, traders said.

Rising supplies from the South Asian country may help cool soymeal prices that have jumped 14% in the past six months in Chicago and lift profit at processors including Ruchi Soya Industries Ltd., Adani and KS Oils Ltd. India competes with the US, Argentina and Brazil to supply animal feed to China, Vietnam, Japan and South Korea.

Meanwhile, traders have signed contracts for 150,000 tonnes to 200,000 tonnes with buyers in Vietnam and South Korea for delivery in the December quarter, Rajesh Agrawal, a coordinator for the Soy Processors Association of India, said last week. Shipments may surge to 4 million tonnes, the most since 2007-2008, from 2.9 million tonnes this season, he said.

Soymeal, mixed with poultry feed as a form of protein to aid birds' growth, is being offered at about US$370 a tonne on a free-on-board basis at Indian ports, traders said.

December-delivery soymeal fell as much as 0.7% to US$308.20 a tonne in electronic trading on the CBOT. Soy traded near a 15-month high on speculation that China may increase purchases as freezing weather hurts crops in the world's biggest buyer of the oilseed. The November-delivery contract climbed as much as 0.9% to US$10.9825 bushel. The price touched a 15-month high of US$10.995 on September 20.

The monsoon, the main source of irrigation for the nation's 235 million farmers, has beaten the weather bureau's prediction because of a delay in the withdrawal of the rain-bearing clouds.