September 24, 2009

Indian soy production may climb 12 percent next year as farmers planted more acres with the oilseed after the main growing areas escaped a drought, a trader said.

Output may be as much as 10 million tonnes in the harvesting season starting October 1, compared with 8.9 million tonnes this year, said Atul Chaturvedi, president at Adani Enterprises Ltd., the nation's biggest trader of farm goods.

A bigger soy crop in India may cut sales of animal feed by processors including US-based Bunge Ltd. and Latin American suppliers to Japan and South Korea, the biggest buyers. Soymeal prices have declined 16 percent in the past year.

Chaturvedi said prices could come under pressure as supplies increase not just from India, but also from the US.

US soy production is likely to reach a record of 3.245 billion bushels this year, up 9.7 percent from last year, the USDA estimated on September 11.

US inventories on August 31 totalled 110 million bushels, the smallest pre-harvest total since 1977, government data shows.

Soymeal for delivery in December lost as much as 0.8 percent to US$276.50 a short tonne in after-hours trading in Chicago. That compares with about US$360-US$365 a long tonne for the commodity supplied to Indian ports on the western coast, Chaturvedi said.

The area sown with soy rose to 9.67 million hectares as of August 31, compared with 9.62 million hectares a year earlier, the Soybean Processors Association of India said September 4.

The central Indian state of Madhya Pradesh, the biggest grower, boosted the area under the crop by 3 percent to 5.29 million hectares, the group said.

Rains over central states, including Madhya Pradesh, have been near normal in the June-September monsoon season, bucking dry weather conditions that have caused a drought in almost half the country, according to the weather bureau.