COMMODITY PROFILE SOYBEAN The soybean or soya bean (Glycine max) is known as the Golden Bean of the 20 th century. Though Soybean is a legume crop, it is classed as an oilseed rather than a pulse. It is grown in tropical, subtropical, and temperate climates. Soybean is the world s most cultivated oilseed. The soybean is often called the miracle crop. It is the world's foremost provider of protein and oil. Soybeans contain around 18% oil and 45% of proteins. It is a good source of protein because it contains a significant amount of essential amino acids. Soybeans are the primary ingredients in many processed foods, including dairy product substitutes. It is also used to make soy sauce, and the oil is used in many industrial applications. The beans contain significant amounts of alpha-linolenic acid, an omega-3 fatty acid, and the isoflavones genistein and daidzein. It has emerged as one of the important commercial crop in many countries. Due to its worldwide popularity, the international trade of Soybean is spread globally. Soybeans now account for about 60% of the total global oilseed production of 390-425 million tons with cottonseed, the closest competitor. Climate Soybean is a legume that grows in tropical, subtropical, and temperate climates. It can withstand excessive heat or severe winters. This needs about 15 to 32 C temperature for germination but for rapid growth, the crop needs higher temperature. When temperature is low, flowering gets delayed. The crop requires about 60-65 cm annual rainfall. Drought at flowering or just before flowering results in flower and pod drops, while rains during maturity impair the grain quality of soybean.
Crop Importance The Soybean is gaining popularity on account of its unique characteristics. Soybean has great potential as an exceptionally nutritive and very rich protein food. It can supply the much needed protein to human diets, because it contains above 40% protein of superior quality and all the essential amino acids particularly glycine, tryptophan and lysine, similar to cow s milk and animal proteins. Soybean also contains about 20 per cent oil with an important fatty acid, lecithin and Vitamin A and D. The 4% mineral salts of Soybeans are fairly rich in phosphorous and calcium. It plays a significant role in preventing and treating chronic diseases such as heart ailments, osteoporosis, cancer, kidney ailments and menopausal syndromes. Major constituents of Soybean Components Percentage Proteins 40 Carbohydrates 30 Fibre 5 Lecithins 0.5 Saponins 4 Oil 18-20 Uses of Soybean The commodity has been commercially exploited for its utility as edible oil and animal feed. On crushing the mature beans, around 18% oil could be obtained, the rest being the oil cake/meal, which forms the prime source of protein in animal feeds. Of late, the commodity is being exploited for manufacturing of various snack foods like edible grade soy meal soya milk, tofu, nuggets, flour, extruded proteins, etc. Major proportion of soybean (about 85%) produce is crushed and bi-products of soybean are derived. These by-products are traded individually. In other words, soybean can be used in different forms into the following categories:
Soybean as a whole: It includes various types of edible forms of soybean like bean sprouts, baked soybean, soybean flour for baking purposes, roasted soybean for confectionary purposes, soy butter, soy coffee and most importantly soy seed. In this category, seeds of soybean are consumed. Whole soybean products: Seed; soy flour; soy sauce; soy paneer (Tofu); and soymilk. Soybean protein products: Textured vegetable protein; and isolated soy protein. Soybean based industrial products: Printing inks; cosmetics; paints; soaps/detergents/ toiletries Soybean food products; and plastics and rubber industry. Soybean meal: The remnant after the soybean oil extraction is called soybean meal. It has high protein content and is easily digestible and that is why it serves as a very good fertilizer and as an animal feed. It accounts for about 65% of the world s total feed. Soybean meal products: Animal feed; poultry feed; and feed for aqua culture. Soy oil: It is extracted from the basic soybean through complex refining process. This complex process helps in deriving at the soy oil removing the material, which may affect the color and the taste of the oil. It is the second most traded edible oil in the international market after palm oil. Soybean oil products: Cooking oil; baking products; margarine; and salad oil. Soybean Seasonality Table 1: Soybean Crop Calendar
Sowing: Harvesting: In India, soybean is purely a Kharif crop, whose sowing begins by end-june with the arrival of south-west monsoon. The crop, which is ready for harvest by the end of September, starts entering the market from October onwards. Crushing for oil and meal starts from October, peaking during the subsequent two-three months. While the ready availability of bean is restricted only to the six-month period of October-March, its consumption in the form of oil and meal is spread throughout the year. Sowing Season: June - July Harvesting Season: September- October Marketing Season: October- March Crushing Season: Crushing for oil and meal starts from October, peaks during the subsequent two-three months.
Global Scenario Soybean is the single largest oilseed produced in the World. Soybean area and production has been continuously increasing year after year. World production of soybean for 2008-09 is projected at 224.10 million tonne, up by 1.47% as compared to 220.86 million tonne in 2007-08. The US accounts for 34% of world soybean production, while Brazil accounts 27%, Argentina 20%, China 7% and India contributes only 4% of the total global soybean production. World Soybean Demand-Supply Table 2: World Supply and Demand (million tons) Year Beginning Total Production Imports Stocks Supply Exports Total Ending Consumption Stocks 2000-01 30.20 175.76 53.05 259.01 53.76 171.56 33.70 2001-02 33.70 184.82 54.39 272.90 52.89 184.48 35.53 2002-03 35.53 196.87 62.91 295.31 60.97 191.47 42.87 2003-04 42.87 186.64 54.00 283.51 56.02 189.60 37.89 2004-05 37.89 215.78 63.47 317.14 64.75 204.91 47.47 2005-06 47.47 220.67 64.13 332.27 63.80 215.26 53.21 2006-07 53.21 237.11 69.06 359.38 71.31 225.19 62.89 2007-08 62.89 221.18 78.16 362.22 79.61 229.69 52.92 2008-09 52.92 210.91 72.35 336.18 72.57 221.77 41.85 2009-10 41.85 241.67 74.40 357.92 75.35 231.55 51.02 Source: USDA
World Soybean Area and production Fig. 1: Soybean Area and Production Production (million tons) 240 230 220 210 200 190 180 170 160 150 100 95 90 85 80 75 70 Area (million ha) 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 Production 2006-07 Area 2007-08 2008-09 2009-10* * estimated Source: USDA Soybean area and production has been continuously increasing year after year. The production averaged at 226 million tons (from 2005-06 to 2009-10) from around 94.7 million-hectare areas. In 2009-10, the area under crop is seen at around 98.8 million hectares. Fig. 2: Share of Major Countries in Soybean Area 1% 1% 3% 10% 9% 17% 1% United States 1% 4% Brazil Argentina 30% India China Paraguay Canada Bolivia 23% Russia Indonesia Other Source: USDA Note: Average soybean area from 2005-06 till 2009-10 is 94.7 million tons.
In terms of area under soybean (Average from 2005-06 to 2009-10), United States ranks first followed by Brazil, Argentina, India and China. Fig. 3: Major Soybean Producing Countries 1% 2% 4% 7% 4% 37% United States Brazil Argentina China India 19% Paraguay Canada 26% Others Source: USDA Note: Average soybean production from 2005-06 till 2009-10 is 226 million tons. The single largest producer of soybean is the United States, which accounted for about 37% (average from 2004-05 to 2009-10) with the acreage of around 29 million hectares. Other major soybean producing countries are Brazil with 26% production followed by Argentina (19%), China (7%) and India (4%).
Global EXIM Trade Fig. 4: Global Soybean Export and Import 80 75 in million tons 70 65 60 55 50 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10* Imports Exports Source: USDA *estimated Due to diversified use of soybean, the global EXIM trade has been continuously increased year after year. Average annual global soybean export is around 72.5 million tons and import is averaged at 71.6 million tons (Average from 2005-06 to 2009-10). Fig. 5: Major Soybean Importing Countries 2% 3% 5% 17% 48% China EU-27 Japan Mexico 5% Taiwan Thailand 20% Others Source: SOPA Note: Average soybean import from 2005-06 till 2009-10 is 71.6 million tons.
Major importing countries included China, which accounts around half of total import at 48%, followed by EU-27, Japan, Mexico, Taiwan and Thailand. Fig. 6: Global Soybean Consumption 240 230 220 in million tons 210 200 190 180 170 160 150 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10* Source: USDA Global soybean consumption has increased year after year and it is averaged at near 224 million tons. Consumption has declined in the year 2008-09 and ruled at 221.7 million tons compared with a year ago. It is anticipated to regain the up trend in 2009-10.
Domestic Scenario Soybean is the most important oilseed among kharif oilseed crops. India is the fifth largest soybean producing country in the world. India harvested about 89 lakh tonne of soybean against the world annual production of 2,240 lakh tonne in 2008-09. The production is down around 6% in 2008-09 from 94.60 lakh tonne in the 2007-2008. Soybean & Oilseeds Production in India (in Million Tonnes) Fig. 7: Soybean vs Oilseeds Production 35 30 25 20 15 10 5 0 1999-00 2001-02 2003-04 2005-06 2007-08 Soybean Source: Solvent Extractors Association of India All Oilseeds
Area and Production of Soybean in India Area & Production 11 10 9 8 7 6 Fig. 8: Soybean Area and Production 5 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010* Area Harvested (mln ha) Production (mln tons) Source: USDA The average domestic production of soybean is at around 8.76 million tons with an average area of 8.82 million hectare (average from 2005-06 to 2009-10). Soybean area and production has witnessed a continuous increase due to higher price realization. Fig. 9: Major Soybean Producing States Area and Prod. 5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 4.879 4.981 2.652 3.237 0.764 0.735 0.107 0.137 0.162 0.154 0.11 0.088 0.176 0.141 Madhya Pradesh Maharashtra Rajasthan Andhra Pradesh Area (million hectare) Karnataka Chattisgarh Production (in million tons) Other States Source: SOPA Major production comes from Madhya Pradesh (53%), followed by Maharashtra (34%) and Rajasthan (8%). Madhya Pradesh accounts for 53% of domestic production with 55% acreage. Other producing states are Andhra Pradesh, Karnataka and Chattisgarh.
Crushing, Meal and Oil Production In million tons 8 7 6 5 4 3 2 1 Fig. 10: Yearly Crushing, Production of Meal & Oil in India 0 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 Soybean Crushed Extraction Produced Oil Produced Source: SOPA Soybean is crushed for production of soy oil and other extracted product. India accounts for an average of 4.41 million tons of soybean crushed annually, which results around 3.62 million tons of extraction product and 0.79 million tons of soy oil. In recent years the crushing percentage has increased. Import & Export of Soybean/Oil/Oilmeal from India Export of Soy Meal India is one of the major exporters of Soy meal to the Asian countries. Vietnam, South Korea, Japan, Indonesia and China are some of the major importers of Soy meal from India. Generally, soy meal exports start increasing from the month of September and peak during the month of November to March. From April month onwards, exports start decreasing.
Fig. 11: Indian Soy Meal Exports (April - March) 5 in million tons 4 3 2 1 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 Source: SOPA 2004-05 2005-06 2006-07 2007-08 2008-09 Export of soybean meal from India is averaged at around 3 million tons. In recent years soybean meal exports increasing and stood at 4.2 million tons in in the year 2008-09. Import of Soy oil India is the third largest importer of Soy oil in the world. Soy oil import has decreased to 0.7 lakh tonnes in 2007-08 from 1.72 lakh tonnes soy oil import in 2005-06. It is because of more import of cheaper palm oils in India. Major Trading Centers Indore, Ujjain, Dewas & Astha in Madhya Pradesh and Nagpur & Sangli in Maharashtra are the major trading centers of Soybean & Soy oil. State Madhya Pradesh Maharashtra Rajasthan Major Trading Centers Indore, Ujjain, Dewas & Astha Nagpur & Sangli Kota
Soybean Prices Spot markets of Indore & Mumbai serve as the reference market for Soybean & soy oil prices. While Indore price reflects the domestically crushed Soybean oil, Mumbai price indicates the imported Soy oil price. Fig. 12: Soybean Spot Prices at Indore from 2001 to 2009 (up to July) Source: Agmarknet Factors influencing Prices Weather at all the producing centers, domestic and international. The pod bearing period, being the most crucial. The area planted, determined by the price of soybean against that of competitive crops, viz., maize, jowar, bajra. Government policies such as Minimum Support Price (MSP) fixed for the crop, import duty & export of its derivatives Pests and diseases. Demand for Soybean from Oil extractors and Farmers The crush margin between meal, oil and seed The supply-demand and price scenario of competitive oils, viz., palm oil International soy price movement at CBOT, being the major international reference market
International market price for soy meal export Infections affecting poultry and cattle like bird flu Major International Exchanges for Soybean Trade Chicago Board of Trade (CBOT) The South African Futures Exchange (SAFEX) Dalian Commodity Exchange (DC) Kansai Commodities Exchange (KEX) in Japan Tokyo Grain Exchange (TGE) in Japan References National Research Centre for Soybean The Soybean Processors Association of India (SOPA) The U.S. Department of Agriculture (USDA) www.soybean.org Agmarknet Ministry of Agriculture Food and Agriculture Organization