August 9, 2011

 

India's 2011-12 soy output forecast to grow 10.5%

 

 

India's soy production in 2011-12 is likely to climb 10.5% to 10.5 million tonnes as farmers extend planting area and rains are adequate, raising prospect for higher soymeal exports in the year.

 

"Area is up. Weather is so far good in Maharashtra and Madhya Pradesh. Production should rise by one million tonnes from last year's level," said B.V. Mehta, executive director of the Solvent Extractors' Association of India (SEA).

 

In 2010-11 the country produced 9.5 million tonnes of soy, the main summer-sown oilseed crop.

 

Madhya Pradesh and Maharashtra are the country's top two producing states, accounting for over 85% of total output. Soy is crushed to produce soymeal and oil.

 

As on August 5, the acreage under soy in India stood at 10.01 million hectares against 8.97 million hectares a year ago, farm ministry data showed last week.

 

Soy production could rise by up to one million tonnes, but the weather will need to remain normal in August, a key month for the crop's vegetative growth and flowering, analysts said.

 

Mehta said higher soy output would give the flexibility for overseas shipments, although price would be key.

 

The country is likely to export 4.1 million tonnes of soymeal in the current crop year ending in September, sharply higher than 2.2 million tonnes a year ago.

 

Indian soymeal is preferred by Asian buyers over Latin American supplies as it is derived from non-genetically modified soy. Geographical proximity also makes Indian soymeal less expensive for Asian importers.

 

Indian soymeal exports have also benefited from a rise in demand from Middle East countries. Oilmeal exports in April to July to the Middle East soared 286% to 174,549 tonnes, data compiled by SEA showed.

 

Higher soy production, however, is not seen helping the country in reducing vegetable oil imports as the area sown with higher oil crops like groundnut and sunflower has shrunk, Mehta said.

 

Soy contains around 19% oil while groundnut contains over 45% oil.

 

India's vegetable oil imports in the 2011-12 could rise by up to 5.7%, to 9.2-9.3 million tonnes, despite steady domestic output as rising prosperity will boost demand, Mistry added.

 

The country buys mainly palm oil from Indonesia and Malaysia and a small quantity of soyoil from Argentina and Brazil.