India's soyabean output likely to fall 22 percent

India's soyabean 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 soyabean output could require India, the world's biggest importer of edible oils, to raise soyaoil and palm oil imports during the 2017/18 marketing year starting from November. India's soyameal exports may decline as well if prices rise.
India is likely to produce 9 million tonnes of soyabeans during the 2017/18 crop year starting from October 1, down from 11.5 million tonnes in the current year, said Dinesh Shahra, managing director of Ruchi Soyaa Industries, India's biggest publicly listed vegetable oil refiner. Farmers have cultivated soyabeans 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.
"Soyabean 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 soyabeans 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 soyabean 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 soyabeans 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 soyabean prices are likely to rise because of the lower output, which would limit soyameal exports, industry officials said. "We are already struggling to export soyameal. 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 soyameal 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, soyabean 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 Soyaa.