Soybean output may rise 20%

Production will climb to 9.25 mn tonnes in Oct-Sept period from 7.69 mn tonnes

Soybean production in India, the second-largest importer of vegetable oils, will rise 20 per cent to a record after farmers planted more land and monsoon rains boosted yields, the US Foreign Agricultural Service said.

Soybean production will climb to 9.25 million tonnes in the marketing year that began on October 1 from 7.69 million last year, the US embassy staff in New Delhi said in a report on Wednesday.

The forecast rose from 8.09 million tonnes after the area planted jumped 9 per cent to a record 8.85 million hectares (21.9 million acres).

"Production estimates for the current year are viewed as a sign of some relief,'' the US analysts said. Soybean futures in Chicago closed on Wednesday at the highest since July 1973.

Most of the country's increased production will result from expanded planting, with timely rains benefiting seed germination and pod filling, according to the report. Yields also gained from use of herbicides and improved crop management practices.

India's animal-feed production from soybeans will rise 20 per cent to a record 6.37 million tonnes from 5.29 million, the US staff said. Protein feed exports will rise 26 per cent to 4.4 million tonnes from 3.46 million.

Production of cooking oil from soybeans will rise 21 per cent to 1.4 million tonnes from 1.16 million, according to the report. Soybean oil imports will fall 11 per cent to 1.3 million tonnes from an estimated 1.46 million.

The country's imports of oils made from soybeans, sunflowers and palm trees jumped 16 per cent to a record 4.85 million tonnes in the marketing year that ended September 30.

Growing Concern
"Maintaining adequate levels of edible oil imports is emerging as a growing issue of concern,'' according to the report.

"International prices are expected to remain firm due to growing demand for biofuels, low production estimates from some of the world's major edible oil producers, rising crude oil prices, and freight rates.''

India didn't revise benchmark import prices for crude palm and soybean oil during meetings November 15. The benchmarks, unchanged since August 2006, were introduced to prevent traders from paying lower import duties by understating edible oil prices.

Soybean futures for January delivery rose 16.5 cents, or 1.5 per cent, to $10.87 a bushel on the Chicago Board of Trade. Futures yesterday reached $10.90, the highest intraday price since June 1988. Most-active futures are up 63 per cent in the past year after US farmers planted the fewest acres in 12 years to sow more corn.

Soybean oil for January delivery rose 0.96 cent, or 2.1 per cent, to 46.22 cents a pound in Chicago after earlier rising to a 33-year high of 46.29 cents. Most-active futures have gained 59 per cent in the past year on increased demand for alternative fuels made from oilseeds including soybeans.