India is likely to produce 10.46 million tonnes of soybean in 2020, nearly 15 percent lower than the previous estimate, as excessive rainfall during harvesting and pest diseases hit the oilseed, a leading trade body said in a statement.
Lower-than-expected production of main summer-sown oilseed could prompt the world's biggest vegetable oil importer increase costly purchases of palm oil, soyoil and sunflower oil from Indonesia, Malaysia, Argentina and Ukraine.
Regular rainfall during harvesting and the pest and disease attacks in Madhya Pradesh and Rajasthan, biggest and third biggest producers in the country respectively, badly affected crop and led to low yields, according to the Soybean Processors Association of India.
The trade body had earlier estimated India was likely to produce 12.25 million tonnes of soybeans on the back of higher area under the oilseed and expectations that yields would rise amid ample monsoon rainfall.
Local soybean prices jumped to their highest level in eight months on Monday.
Excessive speculation has caused the price rise and there is need to suspend futures trading in soybean, the SOPA demanded in a letter written to market regulator Securities and Exchange Board of India.
Soybean prices could come under pressure in coming weeks after supplies start rising from the new season crop, said B.V. Mehta, executive director of the Solvent Extractors' Association, another trade body.
"Soymeal exports are not picking up. Soybean prices won't sustain at higher level without soymeal exports," Mehta said.
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