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G. Chandrashekhar

Mumbai , Feb. 16

BOOMING trade in soyabean and derivatives in recent years has left wheat and coarse grains behind.

Rising unabated since the early 1990s, global trade in soyabean and soyabean products (meal and oil) has surpassed wheat, the traditional leader in agricultural commodity trade, as also total coarse grains.

World trade in wheat hovers between 104 million tonnes (mt) and 108 mt, while coarse grains trade is around 98-102 mt.

Production of bean, meal and oil has been rising consistently in response to growing global demand for vegetable oil and animal feed. Soyabean yields too have risen over the years in principal producing countries and currently stands at about 2.75 tonnes per hectare.

Continued strong growth in global demand for vegetable oil and protein meal is expected to maintain the trade in soyabean and its products well above wheat and coarse grains throughout the next decade, the US Department of Agriculture said in its latest baseline projections to 2014.

The three major commodity groupings, namely wheat, coarse grains and oilseeds (including soyabean), compete with each other and with other crops for increasingly limited temperate cropland.

However, previously uncropped land in tropical regions of Brazil and Indonesia are being converted to soyabean and palm oil production.

Some estimates suggest up to 50 million hectares are available in Brazil alone that could potentially come under soyabean cultivation. Similarly, Indonesian palm oil production is forecast to continue to rise rapidly and surpass that of Malaysia (14 mt) in the coming years because of land availability and lower production cost.

Currently the world's largest producer of soyabean, the US is expected to face competition from Brazil over the next several years.

While low prices may help US soyabean exports to rise during 2005-07, exports are then projected to level off during 2009-14 largely due to inroads made by Brazil resulting in a loss of market share for US soyabean and derivatives by the next decade.

The projections suggest in the US soyabean plantings initially decline from a relatively high level in 2004 in response to lower prices caused by record 2004 production (85 mt).

Soyabean acreage declines further through 2009 as higher prices and net returns for competing crops, particularly corn (maize), provide incentives to switch some land from soyabean. Planting then stabilise in the remaining years of the projection.

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