Commodities

As global outlook turns bullish, India expects to produce more soyabean

A J Vinayak Mangaluru | Updated on October 14, 2020 Published on October 14, 2020

Reports of crop damage in India and record projections in Brazil and Argentina are reasons behing the rise in price   -  Bloomberg

At a time when experts are bullish about the global prices of soyabean, the Indore-based Soyabean Processors’ Association of India (SOPA) has estimated an increase of 12.34 per cent in the domestic production during the kharif of 2020.

SOPA, which has released its second advance estimates of soyabean kharif 2020 crop, estimated total production at 104.552 lakh tonnes (lt) for kharif 2020 (up 12 per cent) as against the previous year’s production of 93.06 lt.

Estimates differ

DN Pathak, Executive Director of SOPA, said that two teams of SOPA conducted an extensive field survey of soyabean crop in Madhya Pradesh, Maharashtra and Rajasthan from October 1 to 7. The teams travelled more than 4,000 km and interacted with farmers, mandi officials, people from trade and industry and the government officials. The second advance estimates of soyabean crop of kharif 2020 are based on this survey, he said.

SOPA has estimated the total area under the oilseed for 2020 at 118.38 lakh ha. He said this is higher by about 10 per cent over last year. However, the Government estimates the soyabean acreage at 121.427 lakh ha.

When BusinessLine contacted Pathak to know the reason for the difference in the estimate between SOPA and government, he said there is inter-cropping of tur with soyabean in almost the entire Maharashtra. The reduction in area (estimate by SOPA) is to offset the inter-cropped area, he said.

Stating that the Government’s estimation of area in Maharashtra is at 43.44 lakh ha, he said SOPA has reduced this by 7 per cent to 40.39 lakh ha to account for inter-cropping.

Pathak added that the productivity is likely to be lower than normal.

Soyabean crop in Madhya Pradesh and Rajasthan was badly affected this year due to yellow mosaic virus, stem fly, anthracnose and other pests and diseases.

This resulted in low yield and small seed size.

Prices to rise further

Shubranil Dey, Senior Research Analyst (Commodities-Fundamental), SMC Comtrade Ltd, said that soyabean futures (November) is expected to trade with an upside bias in the range of ₹3,900-4,300 per quintal. On reasons for prices showing upsurge despite the ongoing harvesting season, he said: “Reports of crop damage during this kharif season have lowered market estimates of production, plus there has been a robust rally of US soya on CBOT”.

In the ‘Tri-Star Mega Webinar’ organised by Solvent Extractors’ Association (SEA) of India recently, Thomas Mielke, Chief Editor of Oil World of Germany, said the production of soyabean is expected to increase by 21 mt globally. Giving a very tentative estimate, he said he is still optimistic that Brazil will produce another record crop of 132.50 mt. He forecast soya oil price in Argentina at $820 a tonne for January-June 2021 as compared to $662 in January-June of this year.

Dorab Mistry, Director of Godrej International Limited, Singapore, said that howsoever strong or weak La Nina is it always impacts South America. Added to this, Brazil and parts of Argentina have droughts. The question is how serious the problem will be. “Whichever way you look at soyabean, you have to be bullish,” he said.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on October 14, 2020
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.