India's Soybean Output May Reach Record as Rains Spur Planting

By Pratik Parija

Sept. 28 (Bloomberg) -- India, Asia's biggest supplier of soybean meal, may harvest a record crop for a second year after higher prices and early rains boosted planting.

Soybean production in the year to June 30, 2009, may reach as much as 11.5 million metric tons, compared with 9.5 million tons a year earlier, Dinesh Shahra, managing director of Ruchi Soya Industries Ltd., the nation's biggest processor of the oilseed, said in an interview in Mumbai yesterday.

That compares with 9.94 million tons forecast by the government on Sept. 25 and a range of 10.5 million tons to 11.5 million ton estimated by four company executives, including Sudhakar Desai of Bunge Ltd., at a vegetable oil conference in Mumbai yesterday.

Higher output may increase exports of meal, used as an animal feed, to as much as 6 million tons in the year starting October, from 5 million tons this year, said Shahra.

Increased exports of animal feed made from soybeans to countries including Vietnam, Japan and South Korea may pose competition to suppliers from the U.S., Brazil and Argentina.

Soybean meal futures for December delivery fell 2.4 percent to $320.7 a ton on the Chicago Board of Trade on Sept. 26. The futures have dropped 28 percent from the July 3 peak of $445.70.

Farmers in the central state of Madhya Pradesh, which accounts for more than half of the nation's soybean production, planted the crop 15 to 20 days earlier than normal, the Soybean Processors Association of India, a trade body, said.

Monsoon Rains

Soybeans, which makes up about half of the nation's monsoon- sown oilseeds production, were planted in 9.56 million hectares, 9.4 percent more than a year ago, according to the farm ministry. The oilseed is planted in June and harvested starting this month.

Monsoon rains, which account for four-fifths of the nation's annual showers, were 11 percent above average in the week ended Sept. 17, according to the India Meteorological Department.

Soybeans in India may decline and trade in the range of 1,650 and 1900 rupees ($40.8) per 100 kilograms (220 pounds) by the end of this year on higher output compared with 2,150 rupees now, according to 10 company officials, including Shailesh Singh of Cargill India Pvt., surveyed at the vegetable oil conference yesterday in Mumbai.

Soybean oil in India may trade in the range of 460 and 500 rupees per 10 kilograms by Dec. 31, compared with 550 rupees now, said the company officials, including Atul Chaturvedi of Adani Enterprises.

India, which grows non-genetically modified soybeans, sells more than 70 percent of its animal feed output abroad. The meal is fed to animals as a protein booster to aid growth.

To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net