ALSO READIndia raises soybean minimum purchase price by 10 percent - trade sources India's industrial output up 3.1 percent in April India's industrial output up 1.7 percent in May India coffee output could hit 8-year low on weaker rainfall, pest attack - industry body India's May tea output rises 18.4 perecnt - Board
By Rajendra Jadhav
LOHARI, India (Reuters) - India's soybean production during the 2017/2018 crop year may drop 22 percent from a year ago after a reduction in the planting area and because of a prolonged dry spell in key growing regions, industry officials and farmers said.
The lower soybean output could require India, the world's biggest importer of edible oils, to raise soyoil and palm oil imports during the 2017/18 marketing year starting from November. India's soymeal exports may decline as well if prices rise.
India is likely to produce 9 million tonnes of soybeans during the 2017/18 crop year starting from Oct. 1, down from 11.5 million tonnes in the current year, said Dinesh Shahra, managing director of Ruchi Soya Industries, India's biggest publicly listed vegetable oil refiner.
Farmers have cultivated soybeans on 10.5 million hectares this year, down 8.4 percent from a year ago, data from the Ministry of Agriculture and Farmers Welfare showed on Friday.
"Soybean farmers shifted to other crops due to poor returns last year. On top of it, the dry spell hit productivity," said Govindbhai Patel, managing director of trading firm G.G. Patel & Nikhil Research Co.
Indian farmers cultivate soybeans through rainfall rather than irrigation and growing starts with the monsoon rains in June.
This year, a prolonged dry spell in July and August curtailed the crop in the states of Madhya Pradesh and Maharashtra, which account for nearly 85 percent of the country's total soybean production.
"Flowering was good, but the dry spell hit pod formation," said Subhash Mhaisne, a farmer from the village of Lohari, 600 km (372 miles) northeast from Mumbai in Maharashtra, referring to the pockets on the plants where the soybeans develop.
"Plants have hardly 20 pods. Had we got rainfall during flower stage, plants could have more than 70 pods," Mhaisne said while showing pest infestation at his 25-acre (10.1-hectare) farm.
Local soybean prices are likely to rise because of the lower output, which would limit soymeal exports, industry officials said.
"We are already struggling to export soymeal. With lower crop, exports could fall next season," said Sandeep Bajoria, chief executive of the Sunvin group, a vegetable oil importer.
Indian exporters were quoting soymeal at about $405 per tonne on a free-on-board basis, nearly $100 more than supplies from rivals Argentina and Brazil.
Despite the lower output, soybean supplies will be higher than demand as at the start of the new marketing year stockpiles are expected to be 1.6 million tonnes, compared to 400,000 tonnes a year ago, said Shahra of Ruchi Soya.
(Reporting by Rajendra Jadhav; Editing by Christian Schmollinger)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)