September 20, 2011

 

India to be net soy importer by 2015

 

 

A developing population and economic growth has resulted in local demand for soy in India to increase, thus, causing the country to be a net importer by 2015, according to the United Soybean Board on Monday (Sep 19).

 

According to Reuters, India is the world's fifth-biggest soy producer after the US, Brazil, Argentina and China, and it contributes about 5% to global output.

 

"Long-term, India has got a shot," Jim Call, international marketing chairman of producers' lobby group, United Soybean Board said. "I am talking 2015, that they could actually start importing soy for the first time.

 

"It is due to population growth, economy growing, people moving into the middle class, and their own production being limited as far as their land-base."

 

India's domestic demand driven economy grew 7.7% in the April-June period, its weakest pace in six quarters, but outperformed even gloomier predictions.

 

India's soy output in 2011/12 is likely to rise 10.5% to 10.5 million tonnes as farmers plant a larger area with the crop and rains are adequate, a senior industry official said last month.

 

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.

 

"Everybody has been looking at India for many years, and they have been self-sufficient and an exporter of beans into that Asian market," Call said. "Once they do not export into that Asian market anymore, then other markets will open up too.

 

"India demand will be in poultry, dairy and they have a vegetarian diet, so they consume huge amounts of soy in their foods directly. They are also huge soyoil users because they fry a lot of stuff," he added.

 

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.

 

Global 2011/12 soy production is likely to reach about 265 million tonnes, Oil World forecasts, with the US 2011/12 soy crop likely to fall to 88.5 million tonnes from 90.6 million tonnes in 2010/11.

 

Nearly 60% of US soy exports go to China, with other large markets being Mexico, Japan and Taiwan.

 

Last week, the USDA estimated soy production at 3.085 billion bushels, compared with trade estimates for 3.032 billion bushels and its August estimate of 3.056 billion.

 

November soy was down 0.5% to US$13.48 a bushel at 0547 GMT.

 

"If they start coming out with some really low numbers on corn, that will increase corn plantings because prices will go up," said Call, who has been involved in the marketing of the soy industry for about 10 years.

 

Strong demand from developing Asian countries such as China, the world's second-largest corn consumer, coupled with the hottest summer in over half a century in top producer, the US, has pushed CBOT corn futures to record highs recently.

 

"That means bean acres will be down, so beans could be fairly strong," Call added on soy. "I would say in that US$13-14 range for the next six months for sure. It is hard to predict any further than that."