Faced with increased availability of soybean from last year’s carry over stock, oil mills have increased crushing to 50 per cent of capacity from 35 per cent a year ago.
“Soya crushing mills are currently operating with 50 per cent of installed capacity due to sudden increase in raw material,” said Rajesh Agarwal, coordinator of the Indore-based Soybean Processors Association (Sopa).
Farmers and stockists had held stocks of nearly 3.5 million tonnes until July 2010 from last year’ total estimated output of 9 million tonnes. They have started releasing inventories gradually into the market. As a consequence, soybean arrivals in major mandis have risen sharply. Generally, during the ongoing lean season, arrivals fall due to unavailability of beans at the hands of farmers and stockists.
“Yes, our production capacity has increased,” said Dinesh Shahra, managing director of India’s largest soya crushers, Ruchi Soya Industries.
Rainfall was evenly distributed across the major soya planting states including Madhya Pradesh and Maharashtra. Therefore, soya output is forecast to be a bumper this year, as pods have been better and healthy compared to last year when monsoon was deficient. India’s output is estimated to rise to 9.5 million tonnes this kharif season. In Madhya Pradesh alone, output is forecast to touch 6 million tonnes, a record in the state.
Today, farmers and stockists are releasing between 600,000-700,000 tonnes per month as against 400,000 tonnes a couple of month ago as they have understood that prices are unlikely to rise from this level.
They are in a hurry to clear their stocks to create storage space for the new crop which is set to hit the market by the end of September. In some areas, the crop is ready to be harvested within a fortnight and if rains continue, it may damage quality.
After the high of Rs 2,143 a quintal on August 16, soybean for delivery in October plunged to Rs 1,995 a quintal on Wednesday on NCDEX.
Interestingly, the government has come up with a report of a never heard before pest namely spodoptera altura. In an official communiqué the government has advised farmers to use Endo Celphos spray to protect the crop.
According to B V Mehta, the increase in mills’ crushing capacity is not going to change overall availability of soya oil in the country as carryover beans are, any how, released into the market before the next harvesting season commences.
India’s soya oil output is estimated at 1,050,000 tonnes in 2009-10 oil year (November - October) as against 1,200,000 tonnes in the corresponding year of the previous year. The country witnessed a domestic soya oil output at 1445,000 tonnes in 2007-08 with increased availability of local soybean.
The country’s total consumption of soya oil, however, is also likely to decline to 1,950,000 tonnes this year as against 2,150,000 in the previous year. The record consumption of soya oil was witnessed in 2005-06, at 2,850,000 tonnes.
India produces nearly 6.5 million tonnes of vegetable oil yearly and consumes 15 million tonnes. The deficit is met through imports from Malaysia, Indonesia and Argentina.
