July 17, 2020
India's soybean production set to increase 15%
Soybean output in India is set to go up by 15% this year thanks to monsoon rains, possibly reducing vegetable oil imports and revive soymeal exports, Reuters reported.
Indian farmers have increased soybean acreage because of incoming monsoon rains, meaning soybean production will increase one year earlier from a previous projection.
The increased production means India may cut down imports of palm oil, soyoil and sunflower oil from Argentina, Indonesia, Malaysia and Ukraine, while opening up the possibility of reviving soymeal exports as a key livestock feed ingredient to Bangladesh, Iran, Japan and Vietnam.
Angshu Mallick, deputy chief executive of Adani Wilmar, a leading edible oil refiner said soybean output will go up 15% if the monsoon remains good.
India's farm ministry said as of July 10, Indian farmers have planted 10.15 million hectares of soybean, compared to 5.17 million hectares in 2019. 9.3 million tonnes of soybean was produced in India last year.
80% of the country's soybean output is centered at Madhya Pradesh and Maharashtra, which the weather department said has received 15% above average rainfall since the monsoon season began June 1.
India increased the soybean minimum buying price to INR 3,880per kg (~US$51.74; INR 10 = US$0.13) a 4.6% increase compared to last year even as demand for soymeal from the poultry sector has dropped.
Davish Jain, chairman of the Soybean Processors Association of India said the increased output will add pressure on domestic soybean prices, as India will carry forward 1.28 million tonnes of soybean stocks, higher than the 170,000 tonnes last year.
Jain said the government should restore the 10% incentive introduced for soymeal exports to push soybean prices, especially as domestic demand has fallen and soymeal exports aren't rising.