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| Soybean acreage likely to decline this year |
| Dilip Kumar Jha / Mumbai May 11, 2010, 00:05 IST |
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The soybean acreage area is estimated to decline by 5 per cent this year due to farmers’ tilt towards more remunerative crops such as pulses, cotton and sugarcane. Farmers in Maharashtra seems especially keen on sowing pulses and sugarcane, as both gave high returns this year.
 Prices of the benchmark Shankar-6 cotton have risen by 26 per cent since October 1, 2009. The average prices of sugarcane and pulses recorded a surge of 40 per cent and 10 per cent, respectively, in the period.
The largest kharif oilseed crop, soybean, was sown on about 9.5 million hectares (ha) last season (November to October), as against the average of 8.5-9 million hectares in the past five years. The apex trade body, the Central Organisation for Oil Industry & Trade (COOIT) assessed total output during the last season at 8.5 million tonnes, compared to 9.5 mt for the previous year, due to favourable climate.
This is substantially lower than the output estimated by the industry body, the Soybean Processors’ Association (Sopa). Trade sources believe COOIT’s estimate factors in crop damage last year in Maharashtra, the second-largest producer of soybean, due to an insect attack. Sopa, however, estimated total output at a record 9.4 million tonnes.
According to Sopa coordinator and spokesperson Rajesh Agrawal, about 40 per cent of last year’s crop is yet to be marketed. This means farmers are holding nearly half of last year’s output in anticipation of higher prices. With about a million tonnes of soybean expected to be used for sowing this season, about three to three and a half million tonnes is yet to be crushed.
Farmers held the output through the year as there was initial talk of the government levying some duty on crude and refined oil imports, which could take oil and bean prices up. But, the government is still struggling to control food inflation within 7-8 per cent, so the duty levy remains on hold. As a result, soybean prices softened, as hopes of an oil price rise fell this year.
Agrawal ruled out the possibility of substantial loss in acreage unless adverse weather conditions affected the seed or sprouts. However, he said an overall loss of four to five in area was possible due to farmers willingness to shift to pulses and sugarcane in Maharashtra.
In Madhya Pradesh, the largest producer, the chances of shifting were limited, said Satyanarayan Agarwal, chairman of COOIT. The soil condition does not suit other crops. And, being a sturdy crop, soybean does not require rainfall as much as cotton and sugarcane. Therefore, the oilseed can be grown even in the case of a rain-deficit monsoon.
Hence, chances of crop diversion were limited in Madhya Pradesh, he explained. Sowing had, so far, been normal in Madhya Pradesh during the current kharif season, with about 1.5 million ha already covered.
Farmers held large inventory as prices continued to move southward through the oil year (November-October). Soybean prices fell about 25 per cent from Rs 2,500 per quintal to Rs 2,000 per quintal. Finding the spot edible oil price cheaper than the cost of production, oilseed crushers curtailed their activities last year. This resulted in farmers holding high carry-forward stocks despite India being an edible oil-deficit country, said Sanjay Shah, ex-Chairman of the Indian Oilseeds and Produce Export Promotion Council.
According to the latest estimate by the Solvent Extractors’ Association, farmers are holding currently 18.5 million tonnes of various oilseeds due to low prices.
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