• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Port Info

• Ships in Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• The Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

G. Chandrashekhar

Mumbai , March 24

FRESH concerns are emerging on the global soyabean production front with South American crop prospects looking increasingly suspect.

Reports from the origin suggest the crop size in both Brazil and Argentina could be considerably lower than earlier estimated. Apprehensions over the next US crop, due for planting next month, are also keeping players on the edge as Asian soyabean rust menace can potentially reduce the harvest by as much as 10 per cent, it is widely believed. In its last report on March 10, the US Department of Agriculture (USDA) had estimated Brazilian soyabean crop at 59 million tonnes (mt). The first forecast was 64.5 mt.

However, internal reports from Brazil suggest that the harvest could be considerably lower. Some estimates place the crop size as low as 52 mt.

In Argentina, too, the soyabean crop size is widely believed to be at least 2 mt lower than 39 mt forecast by USDA in its last report. The Indian output number was pared down to 6.5 mt, from the earlier 7.2 mt.

Should the lower estimates for South America turnout right - and traders say they look more realistic - then the global soyabean output would be 14.5 mt less than the preliminary expectation. In other words, world soyabean production in 2004-05 would be 209.5 mt, down from 224 mt forecast earlier this month.

On the demand side, China is widely seen as requiring to import no less than 24-25 mt.

The USDA has estimated China's import need at 22.5 mt. Increased use of vegetable oil for non-food purposes is another demand factor. Diversion of vegetable oil for bio-diesel is likely to increase because of high crude prices, which do not show any signs of relenting.

Rapeseed oil in European Union and soyabean oil in the US are used for production of bio-diesel.

In other words, lower production and higher demand are expected to combine over the next few months to impact the global vegetable oil market. Internal reports in the US suggest the possibility of a two million acre shift from soyabean to corn (maize) in the ensuing planting season because of rust threat in the US Midwest region.

Yields would also be affected. Initial expectation of the size of the next US soyabean crop is 78.5 mt, down from 85.5 mt of the current year.

All this would only mean there is a strong upside for soyabean oil and by implication palm oil and other vegetable oils. Indian government and importers have to closely watch the market for fresh leads.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
`No-rain' week for 10 districts in Kerala

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line