Despite remaining dependent on imports for over 55 per cent of its edible oil demand, India is set to see around a fifth of its soybean
output going uncrushed this season, thanks to a sharp fall in prices and cheap oil imports from Indonesia
The apex industry, Soybean
Processors Association of India (SOPA), has estimated India’s soybean
output at 11.49 million tonnes for the year 2016-17. With a carryover stock of 441,000 tonnes, overall availability of soybean
for crushing and direct consumption stood at 11.93 million tonnes. Around 8.5 million tonnes of the overall availibility is estimated to be used for crushing. Farmers are likely to use 1.2 million tonnes of sowing for the ongoing kharif season. Apart from that, SOPA
estimates 150,000 tonnes for direct consumption and 250,000 tonnes for exports.
“India would have over 2 million tonnes of soybean
left as carryover stocks in the beginning of November 2017. This is a record quantity of soybean
carryover stock reamining for the next season. The major reason for such a large carryover stock is falling soybean
prices in domestic market and cheap import of refined RBD (refined, bleached and diodized) and crude palm oil (CPO) from world’s two large producing countries including Malaysia and Indonesia.
Therefore, farmers are facing huge problems in terms of realisation,” said D N Pathak, Executive Director, SOPA.
Meanwhile, farmers have given thumbs down to soybean
sowing this season due to lower realisation and weak rainfalls during the last one month in major growing centres. The rainfall estimates during the last few days has resulted in better growth of germinated plants and sown seeds. However, the intensity of rainfall during the rest of this season is going to be crucial for plant growth and soybean
The Ministry of Agriculture, however, has on July 14 reported a sharp decline in sowing area under oilseeds
with total acreage at 10.39 million in this kharif sowing season, compared to 11.58 million by the same time last year.
“With the monsoon not living up to its promise, the soybean
sowing has only reached 60-70 per cent of the arable area. We are sincerely hoping that condition would improve in the coming days, else it might warrant re-sowing which will add to the input cost for the farmers,"said Dinesh Shahra, MD, Ruchi Soya Industries Ltd.
"We are closely monitoring the situation. Being in the agricultural space, Ruchi Soya has braved several natural onslaughts like fllods in 2013, drought in 2014 and erratic rainfalls last year. We are prepared to face all eventualities and have strategies in place for meeting any market conditions that may arise,” he added.
Meanwhile, data compiled by the Solvent Extractors’ Association of India (SEA), showed 15 per cent increase in import of vegetable (edible and non-edible) oil at 1.34 million tonnes in June 2017 compared to 1.17 million tonnes in the corresponding month last year.
“Currently, soybean, rapeseed prices are hovering below the minimum support price (MSP). Prices of these oilseeds
have fallen between 20 and 30 per cent over the last one year. The current prevailing prices are the lowest in five years which is enough to discourage farmers to switch to other remunerative crops. To encourage farmers to improve oilseeds
sowing, SEA has strongly represented the government to increase import duty on CPO to 20 per cent and refined oil at 35 per cent to be in effect, immediately,” said B V Mehta, Executive Director, SEA.