Global oilseeds output is projected to increase five per cent next season (September 2021-August 2020) mainly from a growth in soyabean production in the United States and South America, according to the US Department of Agriculture (USDA).

Global soyabean production, in particular, is projected to increase 23 million tonnes (mt) or six per cent to 386 mt. India’s soyabean output is expected to increase 750,000 tonnes to 11.2 mt compared with 10.45 mt this season.

“Given the prevailing prices for soyabean in the global and domestic markets, farmers in India will expand coverage in oilseeds, particularly soyabean,” said BV Mehta, Executive Director, Solvent Extractors Association of India (SEA).

On Wednesday, the most active soyabean futures contract on the Chicago Board of Trade (CBOT) increased to a nine-year-high of $16.29 a bushel (₹44,050 a tonne ) as the market was worried over tight supplies.

The USDA report, however, had an impact on the domestic futures as soyabean June, July and August futures dropped nearly one per cent. June futures were last quoted at ₹7,465 a quintal on the NCDEX. Spot prices at Indore were quoted at ₹7,875 a quintal on Wednesday, according to NCDEX data.

Oilseeds area to rise

“Area under other oilseeds such as groundnut will also increase. We see the coverage of oilseed increasing during kharif as well as rabi sowing,” Mehta said.

The USDA said that barring groundnut and cottonseed, all other oilseeds production could rise to a decade’s high.

Oilseeds consumption is expected to increase three per cent, the strongest annual rise since 2019-20 mainly led by consumption in China, which is rebuilding its pork sector that was hit by African swine fever in 2019.

The consumption is seen higher notwithstanding the surge in the prices of oilseeds over the last couple of months.

China to drive trade

The USDA said that China would be the main driver of oilseeds trade, too. As a result, ending stocks would only be marginally higher than the current season. Beijing is also expected to drive oilmeal demand, mainly through offtake of protein meals.

In view of the higher oilseeds production, global vegetable oils output is expected to increase four per cent driven by palm, sunflower and soyabean oils. Consumption of vegetable oils for food is projected to expand four per cent through sunflower and olive oils, while industrial offtake could increase two per cent.

Soyabean growth

The USDA said that growth in soyabean production could be limited to the US and South America, particularly Brazil. Two-thirds of the gain in soyabean output would be contributed by the US and Brazil as coverage of the crop in these two nations is expected to expand in view of prices topping the peak seen in 2014.

China, on the other hand, will contribute 60 per cent of the global soyabean trade, while soyabean meal offtake would rise three per cent. China will make up 50 per cent of this, the US agency said.

India’s soyameal exports could top 1.7 mt, lower than this season but near a five-year average. Its soya oil imports are expected to be steady at 3.7 mt. Oil imports would be tempered by higher domestic production and surging prices.

India forecast

As regards India, the USDA forecasts higher sunflower production at 1.88 lakh tonnes (lt), besides steady cottonseed (12.31 mt) and rapeseed/mustard (8.5 mt) output. Groundnut production could be lower at six mt with total oilseed production projected at 39.01 mt, marginally higher than this season’s 38.91 mt.

Oilmeal consumption has been pegged at 16.88 mt (16.27 mt this season), while protein meal consumption is seen at 14.46 mt (13.94 mt). Oil use in food consumption is expected to increase a tad to 21.98 mt (21.71 mt).

Overall, domestic edible oil consumption is projected at 22.77 mt (22.44 mt). This will also see edible oil imports rising marginally to 14.74 mt next season (14.57 mt), the USDA said.

Supply scenario

The agency has projected total oilseeds production at 632.23 mt. This will help in production of 62.47 mt of soybean oil.

Palm oil output is forecast at 76.37 mt with India likely to import 8.7 mt of it. Rapeseed production is seen at 73.21 mt, sunflower at 21.15 mt and minor vegetable oils at 3.2 mt.

As regards ending stocks, copra is seen dropping to 0.04 mt (0.05 mt this season) as also groundnut at 4.03 mt (4.52 mt) and rapeseed/mustard at 5.53 mt (5.79 mt). Cottonseed end stocks are seen up at 1.33 mt (1.12 mt), that of palm kernel at 0.24 mt (0.22 mt), sunflower at 2.37 mt (1.98 mt) and soyabean at 91.10 mt (86.55 mt).

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