The area planted to soybean may gain as much as 20 per cent in the year beginning July from 8.85 million hectares last year, Dinesh Shahra, managing director of Ruchi Soya Industries, India's biggest soybean processor, said in an interview in Mumbai.
Prices for soybean and the meal and oil crushed from the oilseeds reached records this year after US farmers planted the smallest acreage in 12 years last season, prompting farmers elsewhere to boost sowing. India exports soybean meal to nations including China, Vietnam, Japan, Indonesia and South Korea.
"There's already a rush among farmers to secure enough soybean seeds ahead of sowing,'' Shahra said. "Farmers have got record prices for both soybeans and meal this year and they are sure to devote every inch of land available to the crop.''
Soybeans for November delivery, the most-active contract, fell 8 cents, or 0.5 per cent, to $15.135 a bushel on the Chicago Board of Trade on Friday. The price reached a record $15.865 on March 3. Soybeans for July delivery on India's National Commodity & Derivatives Exchange fell 0.9 per cent to Rs 2,657.50 ($62) a quintal.
Soybean meal for July delivery fell 0.4 per cent to $417.80 a short tonne, after reaching an all-time high of $421.50 on Thursday.
Early Rains
Farmers in the Indian state of Madhya Pradesh, which accounts for more than half the country's total output, have started planting soybean 15 to 20 days earlier than normal, Rajesh Agrawal spokesman of the Soybean Processors Association of India said.
"Early rains will boost sowing and that will definitely increase production,'' he said. Area under the crop may rise as much as 10 per cent, Agrawal said.
Soybean production may rise to 9.47 million tonnes in the year ending June from 7.15 million tonnes a year earlier, according to the Soybean Processors Association. Meal produced from soybeans is used as animal feed and the oil is used for cooking and alternative fuel.
Farmers may prefer growing soybean in Maharashtra to cotton and sugarcane after local soybean prices more than doubled to Rs 28,000 a tonne, Shahra said. Maharashtra is India's second-biggest grower of cotton and sugarcane.
Meal Exports
"Sugar and cotton haven't matched the return given by soybeans,'' he said. "A higher soybean crop will also be good news for the government, which is trying to control edible oil prices.''
Record soybean production may boost India's meal exports to Southeast Asian countries seeking cheaper alternatives to corn from Latin America, US and China, Shahra said.
India's overseas sales of soybean meal may surpass 4.5 million tonnes for the year through September 2008, according to the Soybean Processors Association. Exports totaled 4.1 million tonnes between October and May, 31 per cent more than a year earlier.
Indian soybean meal for delivery at various ports in Southeast Asia fetched $550 a tonne, more than double the rate a year earlier, Shahra said.
"Supply is tight from Argentina because of the strike and the US meal is more expensive,'' Shahra said. "Meal from India is the best option for buyers in the Asia region.''
