India Soybean Output May Miss Forecast on Lower Yield

By Thomas Kutty Abraham

Jan. 13 (Bloomberg) -- Soybean production in India, Asia’s biggest supplier of soybean meal used in animal feed, may miss a November forecast because of lower yields in some key growing regions, industry officials said.

Output in the year started Oct. 1 may total 9 million metric tons, less than the 9.89 million tons estimated by the industry, B.V. Mehta, executive director of the Solvent Extractors’ Association, said in a phone interview.

Lower output may derail India’s plans to increase exports of the animal feed ingredient to a record for a second year and help support a rally in soybean meal prices in Chicago. The South Asian nation competes with the U.S, Argentina and Brazil to sell feed to buyers including Vietnam, Japan and South Korea.

“Rising prices in the past two months may encourage farmers to hold back some of the produce” paring supply to the domestic market, Rajesh Agrawal, a spokesman for the Soybean Processors Association of India, said from Indore, a central Indian city.

Soybean meal for March delivery rose as much as 1.2 percent to $297.90 a ton in after-hours electronic trading on the Chicago Board of Trade. Prices are up 19 percent in the past three months.

Indian farmers sold as much as 25 percent less in the market since Oct. 1 from a year-ago period, Agrawal said.

“That’s an indication the crop size may be smaller than estimated,” Dinesh Shahra, managing director of Ruchi Soya Industries Ltd., India’s biggest soybean processor, said in a phone interview. “We will need to wait three-to-four weeks to put a figure on the size.”

Crop Size

The country harvested 9.46 million tons of soybeans a year earlier and the Central Organization for Oil Trade and Industry, the biggest group of oilseed processors, estimate this year’s crop at 9.98 million tons. That’s less than the 10.8 million tons predicted by the Soybean Processors Association.

Soybean meal exports were little changed at 1.5 million tons in the December quarter, compared with a growth of more than 70 percent in the previous two quarters, Extractor’s Mehta said.

India, which grows non-genetically modified soybeans, sells more than 70 percent of its animal feed production abroad.

Soybeans traded on India’s National Commodity & Derivatives Exchange Ltd. have advanced 31 percent in the past two months on expectation crops in Brazil and Argentina may be smaller in the absence of adequate rains.

“The bullishness about a lower Latin American crop may last a while,” Ruchi’s Shahra said.

High temperatures and lack of rain in Argentina have hurt corn crops and delayed farmers’ plans to sow soybeans, lowering potential yields, a government weather forecaster said Jan. 9. Argentina is the second-largest exporter of corn after the U.S.

To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net