The importance of soybeans in India

The importance of soybeans in India
Photo by Meredith Petrick / Unsplash

The main source of protein feed and the second-largest source of vegetable oil are both derived from soybeans. India is the world's sixth-largest consumer of soybeans and the fifth-largest producer of the crop.

Only a small portion of India's soybean production is exported; the majority is consumed domestically. The largest producer of soybeans in India is the state of Madhya Pradesh, which contributes around 52% of the country's total production. Maharashtra comes in second with about 30%. The most abundant oilseed crop, soybeans support millions of farmers' livelihoods and create jobs along the crop's value chain (harvesting, processing, and marketing).

For vegetarians and people who cannot afford animal protein, soybeans are a crucial source of protein, minerals, and vitamins. In India, consumption of soy products like soy milk, tofu, and soy flour has been rising, especially in metropolitan regions where wealth is higher and there is a stronger desire for a variety of foods. To produce cooking oil, margarine, and other food products, soybean oil is extracted and used in the food sector. A key component of cattle feed is soybean meal, a leftover after the extraction of soybean oil.

Soybean Production Trends

In India soybean has witnessed a significant upward trend in recent years. With a surge in demand for protein-rich food and feed, coupled with favorable climatic conditions, the country has experienced a steady increase in soybean cultivation. Improved farming practices, availability of high-yielding varieties, and government support through various schemes have contributed to this growth. Farmers have embraced soybean as a lucrative cash crop due to its versatility and profitability. The adoption of modern technologies, such as mechanization and biotechnology, has further enhanced productivity. As a result, India's soybean production has reached new heights, making it one of the leading soybean-producing nations globally.

India’s Import on Soybean from other nations

The domestic Soybean production is expected to rise to 120.40 lakh tonnes in the 2022–23 season from 118.89 lakh tonnes the previous season, according to the Soybean Processors Association of India.

However, as of right now, in the present season, the Indian soybean import has been projected lower by 64% at 2 lakh tonnes in the 2022–23 season based on the hopes of increasing domestic output. During the 2021–2022 season, the country has previously imported 5.55 lakh tonnes of soybeans.

The recent changes in the environment have caused the carry-over stock to remain higher, at 25.15 lakh tonnes compared to 1.83 lakh tonnes the year before. Because of this, around 100 lakh tonnes would be accessible for crushing during this season as opposed to 84 lakh tonnes during the previous 2021–22 season, according to the numbers that have been put forth from the total.

Out of the total output, 13 lakh tonnes are to be set aside for planting, 4 lakh tonnes for direct consumption, and roughly 1 lakh tonnes are to be exported this season.

India’s increased export on Soybean

India was the 20th largest soy exporter in the world in 2020 with soybean exports valued at roughly $50.6 million. The same year, soybeans rose to rank 498 in India's list of top exports and India’s rank is estimated to further increase by the end of the year 2023. Chinese Taipei ($357k), the Seychelles ($230K), and Nepal ($74.8K) have seen some of the fastest increases in demand for Indian soybean exports.

India's soymeal exports have surged recently, due to market fluctuations reaching 225,000 MT in January 2023 and 230,000 MT in February 2023, an increase of 103% and 582%, respectively, year over year. From October 2022 to February 2023, total exports increased by 125% to 856,000 MT from 350,000 MT during the same period in the previous year. Due to logistical issues and weather delays, South American soymeal is less available and more expensive, which is primarily what is causing the rising demand for Indian soymeal.

Soybean price in the Indian Market

The price volatility of soybeans in India has been a significant concern in recent times. Various factors contribute to its volatility, including global market trends, weather conditions, government policies and international trade dynamics. Traders and farmers closely monitor these factors to mitigate risks and make informed decisions in this highly volatile market.

According to the most recent market prices, the average soybean price of a quintal of soybeans is 4833.29. 2245/Quintal is the lowest market price. The most expensive market price per quintal is 7001.

Soybean Production Volume in India

According to recent agricultural statistics of soybean production, India was sixth in output with 11.23 million tonnes in 2020–21 and fourth in area with 12.12 million hectares (29.94 million acres), contributing for 8.86% of the global area.

Madhya Pradesh, Maharashtra, Rajasthan, Karnataka, and Telangana are the main soybean producing states. Government of India soybean production is projected to reach 139.75 lakh tonnes in 2022–2023 as opposed to 129.87 lakh tonnes in 2021–2022 according to the second advance estimates.

The state of Telangana is expected to produce 3.19 lakh tonnes of soybeans in 2022–2023 as opposed to 2.67 lakh tonnes in 2021–2022 according to the 2nd advance estimates.

Factors influencing the yield of soybean production in India

Crop forecasting of soybean in India is a critical task that involves assessing the potential yield and production of soybean crops across different regions of the country. Accurate crop forecasting helps in making informed decisions regarding agricultural planning, resource allocation, and market projections.

● Remote Sensing and Satellite Imagery: Remote sensing techniques, such as satellite imagery, are widely used in crop forecasting. Images captured by satellites can provide valuable data on crop health, vegetation indices, and other relevant parameters. By monitoring the vegetation vigor and growth patterns of soybean crops over time, experts can estimate crop yield and predict potential production.

● Crop Cutting Experiments: Crop cutting experiments involve physically sampling soybean crops in selected areas to determine the yield. Field officers collect random samples from different locations within a specific field and measure the crop's actual yield. These samples are then used  to estimate the overall yield and production for the entire area under cultivation.

● Statistical Models: Statistical models utilize historical data, including crop yields, weather patterns, soil conditions, and other relevant parameters, to develop predictive models. These models help forecast soybean yields based on the correlation between past data and current conditions.

● Weather Data: Weather plays a crucial role in crop growth and yield. Monitoring weather patterns, including rainfall, temperature, humidity, and monsoon conditions, is essential for soybean crop forecasting. Historical weather data, combined with real-time weather information, can help assess the impact of weather conditions on soybean crops and predict their performance.

Impact of heavy rainfall

When there is too much rainfall and flooding it the immediate concern the issues that arise has to do with how long a specific crop can endure being submerged in water. For soybeans, if the soil wasn’t already saturated when the flooding happened, a plant can be entirely immersed for between 2 and 4 days while still surviving.

The temperature and cloud cover have an impact on how long something will last. When it is hot and sunny, the plant may die in two days or less, but when it is chilly and cloudy, the plant may live for four days or longer. Soybeans have been reported to survive after seven days of partial submersion if a piece of the plant remains exposed. If fields with certain types of soil flood,

● Crop Health Monitoring: Regular monitoring of soybean crop health is vital for accurate forecasting. Techniques like drone-based imaging and on-ground surveys can assess factors like pest infestation, disease prevalence, and nutrient deficiencies.

Overall Market Analysis of Soybean in India

The soybean market in India has witnessed significant growth in recent years. The country's rising population, changing dietary patterns, and increasing awareness about the health benefits of soybean products have fueled the demand for soybeans. India is one of the largest producers and consumers of soybean globally. The market is characterized by strong domestic consumption, driven by the food processing industry, animal feed sector, and the growing popularity of vegetarian and vegan diets. Government initiatives to promote soybean cultivation and the expansion of soybean processing facilities further contribute to the market's growth potential, making it a lucrative sector for investors.