Sopa may up output estimate by 3%

The Soybean Processors' Association of India (Sopa) may increase its bean output estimate for year ending June by 3 per cent to 5.8 million tonne from 5.65 mt projected earlier, chairman Rajesh Agrawal said Monday.

The output estimate is likely to be revised upwards as current soybean arrivals are over 60 per cent higher this year, Agrawal said.

Earlier, as arrivals since harvest in January were significantly lower, the output estimate for the crop was reduced to 5.65 mt from the earlier estimate of 7 mt.

However, over the last one month, arrivals have picked up and it is currently, higher than last year's level, Agrawal said.

"We are thus considering revision of (soybean output) estimate to 5.8 mt," he said.

In April, mandi arrivals in Madhya Pradesh were 150,000 tonne against 75,000 tonne last year. Arrivals in other parts of the country including Maharashtra and Rajasthan were 54,000 tonne against 30,000 tonne last year.

In May, 40,000-50,000 bags""of 90 kgs each""are likely to arrive in Madhya Pradesh per day while another 20,000 bags will reach the markets all across the country.

Soybean arrivals, though not at the same pace, are likely to continue till September, Agrawal said.

Soybean arrivals start January and usually end by June. However, this year arrivals picked up late and were not good till March as farmers did not get good prices in mandis despite lower crop output.

While official estimates see soybean output for the current season at 7.2 mt, industry estimates peg it lower at 5.50-5.65 mt.

SOWING & ACREAGE
Sowing of soybean is likely to begin by June 20, Agrawal said.

According to official estimates, total soybean acreage for crop year ending June is 6.5 mt.

For the next crop year starting July, subject to good southwest monsoon, the acreage is likely to rise 8 per cent to 7 million hectares, Agrawal said.

Acreage is seen expanding due to higher prevailing market price of soybean at Rs 1,275-1,300 per 100 kgs compared with the crop's minimum support price of around Rs 1,000 per 100 kgs.

"An increase in productivity is needed," Agrawal said. "Our yield is merely one tonne per hectare""one of the poorest in the world. Only this will help reap benefits in a big way of higher acreage."

He said while acreage in Madhya Pradesh will be largely unchanged, the area under cultivation will increase by 100,000 hectares each in Karnataka, Andhra Pradesh and Tamil Nadu.

The northern parts of the country, especially Rajasthan, will also see a rise in acreage. This season saw a shortfall of 150,000-200,000 hectares in the state due to late monsoon last year.

This shortfall is likely to be made up if this year's monsoon is good, Agrawal said.

Punjab and Haryana will also see a rise in acreage. Agrawal sees soybean acreage in Maharashtra declining primarily because of some farmers shifting to sugarcane cultivation in parts of the state in the wake of a good monsoon.

Maharashtra will see a nearly 110,000 hectare decline in soybean acreage, he said.

2005-06 CROP ESTIMATE
Soybean output is likely to be higher next largely on account of an increase in acreage. "We expect the crop to be over 6.3 mt," Agrawal said.

"However, this rise (in output) will be condition to good monsoon and no pest infestation," he said.

PRICE OUTLOOK
Soybean prices are likely to be lower for the coming two to three months due to an oversupply situation in the market.

"Usually by this time, soybean arrivals go thin. Thus, when mustard arrivals begin in March, the market does not take a hit," Agrawal said. However, this year, soybean arrivals are good. A bumper mustard crop is also putting pressure on the prices, Agrawal said.

Mustard oil and soyoil can be used as substitutes for each other. Soyoil imports are also cheaper due to a good global soybean crop. Overall, oversupply of the soy complex in the domestic market will push prices down, he said.