August 25, 2022
The status of corn and soybean meal supplies and demand in India
Corn is the third most important food grain in India, accounting for about 10% of total cereal production.
It is also the fastest-growing cereal crop in terms of area, production, and productivity.
But the growth rate of corn consumption has outpaced the production growth over the last decade. Furthermore, the war in Ukraine, COVID-19 and low production of key producers have impacted the global corn trade leading to higher prices. This has created an opportunity for corn exports from India to nearby markets like Vietnam and Bangladesh.
Compared to 2019-20, India's corn exports increased nearly sevenfold to US$930.2 million in the April-February period of 2021-22. Still, increased exports might have an adverse impact on the availability of corn for domestic use.
As for demand, about 80-85% of domestic production is utilised for industrial purposes – including 50% for the animal feed industry. The sourcing of corn by 'end use' sectors is impacted by low productivity, seasonality, inefficient post-harvest handling and storage, high logistics cost, volatile pricing and import restrictions.
Overall, India's corn consumption was 27.6 million tonnes in 2020 and is forecast to be 33.8 million tonnes in 2030.
As for soybean, the Solvent Extractors Association of India estimated that soybean crops are likely to be lower at 10 million tonnes compared to the government's estimate of 13.83 million tonnes.
Additionally, the Ministry of Agriculture and Farmers Welfare's third advance estimate for major crops put oilseeds output at 38.5 million tonnes (it was at 35.95 million tonnes last year). The trade estimate for soybean, as announced by SOPA, is 11.9 million tonnes.
However, industry players believe soybean crops are much lower as they do not see the pressure of market arrivals even at the current high price of soybeans. While the government allowed imports of 550,000 tonnes of soybean meal, higher import duties do not make this viable.
In 2021/22, the Indian poultry industry would need at least five million tonnes of soybean meal.
- Dr. Dinesh Bhosale