The Hindu Business Line : Global price rise may boost soyabean plantings

Bean stock
Domestic bean prices also at record high.
Arrivals sparse since stock are at a low.
Maharashtra could gain from farmers switching over to soyabean.

M.R. Subramani

Chennai, July 3 A record price for soyabeans in the global market is likely to spur farmers to plant more of the oilseeds this year. “There is an intention among farmers to grow more soyabean this year. But rains in the next couple of weeks hold the key to any increase in area,” said Mr Rajesh Agrawal, spokesman of the Soyabean Processors Association of India (Sopa).

In Asian trade on Thursday, soyabean July contract was quoted at a record $16.51 a bushel ($750 a tonne). Soyabean prices have been soaring since last week on worries that the US weather may not be conducive for the crop’s growth.

Last year, soyabean production in the country was a record 95 lakh tonnes against 71.5 lakh tonnes the previous year. The production was up on increased acreage of 88.5 lakh hectares and good monsoon. The normal annual acreage for soyabean is 72.53 lakh hectares. However, good prices in the last couple of years have led to a rise in its coverage.

“The initial rains for the soyabean crop has been good. We need follow-up rains. So far, it has been sporadic and not uniform,” Mr Agrawal said.

45% complete

Wherever sufficient rainfall has been received, growers have sown soyabean. “If the soil moisture is good, then farmers go for sowing. At least 45 per cent of the sowing of the crop has been completed. The rest of the sowing should be completed in the next couple of weeks,” he said.

While global prices are ruling high, domestic bean prices are also at a record high. Currently, soyabean is quoted at Rs 26,700-27,000 a tonne, off a record high of Rs 28,000 witnessed a couple of weeks ago.

Arrivals, however, are sparse since stocks with growers and traders are low and also beans are required for sowing. Currently, the daily arrivals are around 400 tonnes.

“The high prices of soyabean will ensure that those who usually grow other crops will switch over to the oilseed,” said Mr Amit Sachdev, Consultant of US Grains Council.

Better returns

“Farmers could switch over to soyabean from pulses and coarse grains,” said Mr Agrawal.

One of the reasons for the switch over is that returns from soyabean are seen higher than corn. For example, if the minimum support price (MSP) of last year is taken into consideration, then soyabean prices are higher by over 2.5 times, whereas prices of maize or other pulses are just about double.

The delay on the part of the Union Government to announce MSP for pulses, oilseeds and grains could also result in the growers taking to soyabean.

“MSP for soyabean is a non-issue as prices are far higher than what the Centre could fix for it this year,” said Mr Agrawal.

Maharashtra scenario

In fact, in view of the switch over, Maharashtra could see a record acreage under soyabean this year. “Maharashtra could gain the maximum from farmers taking to soyabean,” said Mr Agrawal.

While a significant number of growers have shifted from cotton, indications are that sugarcane farmers too could opt for the oilseed.

Again in Rajasthan, growers are taking to soyabean, shelving pulses and maize. “We are likely to see gains in Gujarat, Karnataka and other parts such as Andhra Pradesh in the South,” Mr Agrawal said.

However, as of June 27, area under soyabean trailed. The coverage, according to the Agriculture Minister, was 8.11 lakh hectares against 9.96 lakh hectares during the corresponding period a year ago.

Soyameal exports

Meanwhile, at least 40 lakh tonnes of soyameal is projected to have been exported until June-end. “Soyameal exports are likely to touch a record 47-48 lakh tonnes. We have also received record prices of $490 a tonne,” Mr Agrawal said.

Soyameal exports have gained on higher global oilseed prices. “Exports have mainly been to China and South-East Asia,” Mr Agrawal said.

The higher global prices coupled with rising freight charges have made the South-East nations look to India. Also, exports in smaller consignments to these nations have helped gain a greater foothold.

Nearly eight lakh tonnes are likely to be exported before the oil year ends in October. “We have contracts signed up to November,” industry sources said.