General Characteristics
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- Soybean is an
important global crop and processed soybean is the largest source of
protein feed and second largest source of vegetable oil in the world.
- The major portion of
the global and domestic crop is solvent-extracted with hexane to yield
soy oil and obtain soymeal, which is widely used in the animal feed
industry. It is estimated that above 85% of the output is crushed
worldwide.
- Though, a very small
proportion of the crop is consumed directly by humans, soybean
products appear in a large variety of processed foods.
- The cultivation of
soybean is successful in climates with hot summers, with temperatures
between 20°C to 30°C being optimum. Temperatures below 20°C and over 40°C
are found to retard growth significantly.
- It can grow in a
wide range of soils, with optimum growth in moist alluvial soils with
a good organic content.
- Modern soybean
varieties generally reach a height of around 1 m (3 ft), and take
80-120 days from sowing to harvesting.
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Global Scenario
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- The annual global
soybean production has been in the range of 210-230 million tonnes in
the recent years, accounting for 55-58% of total global oilseed output
of around 390-400 million tonnes.
- US, Brazil,
Argentina, China and India are the major producers in order of
production with production in these countries ranging around 70-80,
55-60, 32-48, 14-16 and 8-10 million tonnes in the recent couple of
years.
- Weather, acreage
under other competitive crops like corn, cotton and pests &
diseases are the major factors influencing production.
- While in US, India
and China crop starts arriving from Aug-Sept, it starts from Jan-Feb
in S. America.
- The annual global
trade in soybean is estimated to be around 70-80 million tonnes.
- While, USA (30 -35
million tonnes), Brazil (23-28 million tonnes), Argentina (5-15
million tonnes) are the exporters of beans, China (35-40 million
tonnes) and EU (12-16 million tonnes) are the major importers.
- In addition to
soybean, soy oil and soymeal are also widely traded globally with
annual trade of around 9 million tonnes and 52 million tonnes
respectively. While, US is the largest exporters for soybeans,
Argentina is the largest exporter of soy oil and soy meal globally.
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Important World Soy Markets
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- Chicago Mercantile
Exchange, which acquired Chicago Board of Trade - the world's oldest
soy futures market
- Dalian Commodity
Exchange - trades the most liquid soybean contracts in the world
- Argentina and Brazil
FOB determine the physical prices
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India in World Soy Industry
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(Rounded figs.)
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Global
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India
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% Share
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(In
million tons)
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Soybean Production
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230
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9
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4
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Soybean Trade
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75
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0
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0
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Soy Oil Production
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35
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1.5
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4
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Soy Oil Imports
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9
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1
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11
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Soy Oil Exports
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9
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0
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0
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Soy Meal Production
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150
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7
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5
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Soy Meal Exports
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52
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3.5
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7
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Soy Meal Imports
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52
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0
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0
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Indian Scenario
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- India's annual
production of soybean has been around 8.5-10 million tonnes in the
recent years with India's production in 2009-10 estimated to be around
8.9 million tonnes by the Government of India.
- The acreage under
this crop has more than doubled in the past two decades to around 11
million hectares currently being sown under this crop, with better
returns encouraging more farmers to adopt this new crop.
- Madhya Pradesh,
Maharashtra, Rajasthan and Andhra Pradesh are the major cultivators of
this important oilseed, with their respective contributions usually
around 60%, 25%, 6-7% and 1-2%.
- Soybean is
exclusively grown in the khariff season in India, with sowing taking
place after the first monsoon showers in late June or early July.
Sowing can extend upto end of July in different parts of the country.
- The harvesting
commences from September, with Maharashtra reporting the earliest
arrivals. October and November are the peak arrival months, with
all-India arrivals crossing 10 lakh bags of approximately 90 kg on the
peak arrival days.
- The production is
dependent on the monsoon and fluctuates between years.
- India is highly
dependent on imports to meet domestic edible oil requirement.
Government policies are in favour of developing the domestic crushing
industry and supporting Indian farmers and do not promote import or
export of soybean. Thus, there is virtually no import or export of
soybeans.
- However, India out
of its total soymeal production of around 6.5-7 million tonnes,
exports around 3.5 million tonnes with Vietnam, Japan, Thailand,
Indonesia, UAE, Greece being the major importers.
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Major Trading Centres
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Indore, Ujjain, Dewas, Mandsore in Madhya Pradesh,
Akola, Sangli, Nagpur in Maharashtra, Kota in Rajasthan are major trading
centres.
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Market Influencing Factors
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- Domestic prices are
highly influenced by the global price movements, with prices highly
correlated with the CME prices.
- Fundamentally,
weather at all producing centers, domestic and international is the
most crucial factor, with the pod bearing period, being the most
crucial.
- United States
Department of Agriculture makes progressive assessment of crops,
stocks, global supply and demand and releases regular reports, which
are widely looked upon by the global market to determine prices.
- The other major
influencing factor is the prices of soy oil and soymeal, which are
in-turn dependent on the fundamentals of global edible oil and global
animal feed industry.
- Locally, prices are
influenced by currency fluctuations, weather, acreage, pest &
diseases, production estimates by industry associations, Government
agencies.
- India imports more
than 60% of its entire edible oil requirement and the entire edible
oilseed and oil sector is a highly sensitive sector. Thus, new
Government policies and apprehensions about new policies have a strong
sway over prices, during periods when new announcements are made or
are about to be made.
- The supply-demand
and price scenario of competitive oils, viz., palmoil.
- The crush margin
between meal, oil and seed
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