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Monsoon Rains are Late, Imperiling Indian Oilseed Harvest

07/23/2019

According to the USDA-Foreign Agricultural Service in New Delhi, forecast oilseed production for the 2019/2020 harvest should amount to 38.3 million metric tons*. This total comprises soybeans, rapeseed, mustard, peanuts, sunflower and cottonseed.

Virtually all oilseeds are dependent on bountiful monsoon rains due to commence in mid-June. There is concern that the southwest monsoon is developing slowly in 2019 and if projections are valid, crop yields will be affected. India has planted 96 million acres to oilseeds with 29 million acres dedicated to soybeans. In the event of a suboptimal harvest, India will be forced to import any shortfall. Given that China has committed to Brazil and Argentina and possibly Ukraine for imports, the U.S. is the logical supplier in the event of high demand from India.

The July WASDE Report projected the volume of soybean exports from the 2019 crop to attain 1,875 million bushels (approximately 51 million metric tons) or 38 percent of the total anticipated supply. In the event of large orders from India the anticipated ending stocks of 795 million bushels will decline to a level that will increase the U.S. domestic price.

For the 2018/2019 season, India imported two million metric tons of soybeans with a similar quantity estimated for 2019/2020. In the event of a lower harvest of oilseeds, India will be forced to import soybean oil in excess of the approximately 3.5 million tons purchased from foreign suppliers during the 2018/2019 season.

*Note: there are 36.7 bushels of soybeans in a metric ton