Soybean acreage in India, Asia’s largest exporter of the animal feed made from the oilseed, is set to increase as much as 10 percent this year as record prices spur farmers to boost sowing. Futures in India slumped.
The area under the crop that will be harvested from Oct. 1 may climb as planting gains in Maharashtra, Karnataka and Rajasthan states, Atul Chaturvedi, chief executive officer of Adani Wilmar Ltd., said in a phone interview today. The acreage was 10.3 million hectares (25.5 million acres) last year, according to the Soybean Processors Association of India.
Soybean prices more than doubled in the past year in India as dry weather parched crops in the U.S., stoking speculation that global oilseed production may decline and boost demand for soybean meal supplies from the South Asian nation. Prices in Chicago have surged 21 percent since June 15 to the highest since July 2008, while futures in Mumbai reached a record today.
“It’s a blasting commodity right now and the record prices are good for the farmers,” Vandana Bharti, vice president of research at SMC Comtrade Ltd., said by phone. “Monsoon is the biggest trigger and if we see normal monsoon by end of July, then we can see a correction in prices.”
Soybeans for August delivery on the National Commodity & Derivatives Exchange Ltd. declined as much as 1.6 percent today after jumping to a record 4,720 rupees ($86) per 100 kilograms. The November-delivery contract rose as much as 1 percent to $16.07 a bushel on the Chicago Board of Trade today, the costliest for the most-active contract since July 2008, before trading at $15.97.
A slow start to the monsoon in India has delayed planting, with the area down 19 percent at 5.45 million hectares as of July 13, according to the farm ministry.
“The main growing-regions have received reasonable rains and I don’t see too much of a panic,” Chaturvedi said.
Monsoon rains, which account for more than 70 percent of India’s annual rainfall, were 21 percent below a 50-year average since June 1, according to the India Meteorological Department.
“The planting is usually completed latest by the end of July,” Rajesh Agrawal, spokesman for the Soybean Processors Association, said yesterday. “From that point of view, that is no major delay.”