Presented By Dr. Davish Jain Managing Director Prestige Group of Industries, Indore, India

1. GLOBAL GRAINS CONGRESS, 2012 November 26-28, SINGAPORE INDIAN OILSEEDS OILMEALS & FEED SCENARIO Presented By Dr. Davish Jain Managing Director Prestige Group of Industries, Indore, India

2. Opening Remarks Allow me to convey to you “DIWALI” Greetings from Oilseeds fraternity of India. Let Diwali – the festival of lights be a harbinger of good luck and prosperity to all the distinguished participants at this Global Grains Congress. I bring to you greetings from all the stakeholders of Indian agro-industry – more especially Soybean and oilseeds sector with which I have been closely involved for the past three decades including as Chairman, Soybean Processors’ Association (SOPA) and Central Organization for Oil Industry and Trade (COOIT), the apex Indian organization of the entire oilseeds industry and trade sector. Contd…

3. Opening Remarks Singapore is a globally acknowledged nerve center for Asian trade & industry especially in grains and oilseeds. It provides the right ambience for meaningful interaction. Participating in the Congress is a galaxy of well-known specialists from all over Asia and renowned world institutions, whom I had the pleasure of meeting last year during the first Global Grains Congress. Both at global as well as national levels, it is necessary to take a long term view for shaping the direction & tempo of growth particularly oilseeds in Asia region.

4. INDIA a Fast Growing Country Largest Democracy Second most populous nation Amongst the Fastest Growing Economy India – a fast growing significant economy in spite of Global Slowdown GDP of over US$ 1.3 Trillion

5. Demand Drivers Consistent GDP growth forecast of ‐ more than 8%. A big expansion in the Indian middle class, due to a big rise in income levels of the poor class. 55% Population depend on Agriculture and allied activities. Therefore it can be said, Indian consumer market will ensure high growth in consumption in coming time.

6. Focus on Soybean Scenario I propose to focus on the emerging scenario in India’s Oilseeds and Feed Sector with special reference to Soybean. Soybean has all along been the dominating leader among major oilseeds with a wide margin of around 60% of total oilseeds production both at global as well as India level.

7. India’s Oilseeds Production

8. Indian Soybean Scenario Golden Soybean Revolution in India, in the last 30 years, has transformed India’s agro-economy and imparted it a global exposure by making it export oriented. India stands on the threshold of the second stage of growth of this sector which has in recent years become both export-oriented for Soymeal and heavily import –oriented for edible oil.

9. Indian Soybean Scenario Import of edible oil now at a value of US$ 10 billion per annum and it is mostly from friendly Asian neighbors – Indonesia and Malaysia. Balanced development of this sector calls for both qualitative and quantitative growth of Soybean and other major oilseeds with spot-light on innovative value-added products both in food and feed sectors.

10. World’s Oilseeds V/s World’s Soybean 10

11. India’s Share in World Soybean Production (in MMT) Table above illustrates that while India’s share in global soybean production is much lower at 4.6% in comparison to USA (28.1%), Brazil (31.1%) and Argentina (21.1%). India faces the challenge both in national & global context to take its production and productivity to higher levels. 11

12. Trend Pattern of Coarse Grain Production in INDIA (Qty in MMT) Maize constitutes around 50-55 % of Major Coarse Grains Production and has risen from 14.7 MMT to 20 MMT i.e. by 36% in a span of 7 years. 12

13. Distribution of Area, Production & Yield of Maize – Region Wise Southern Indian Region accounts for half of the India’s Corn Production. 13

14. Indian Soybean Scenario Despite lower share in world production, the distinguishing feature of Indian Soybean is its exclusive and unique Non-GMO quality-which ensures natural purity. In case of GMO quality, herbicides and weedicides genes are implanted making it prone to health hazards in the long run, since they go into human body through food chain. While Non-GMO quality has created niche markets for risk free food use, it has limitations in increasing productivity, since weed-control is very crucial factor in agriculture.

15. Indian Soybean Scenario In view of lower productivity in comparison to the global average for Non-GMO cultivation, one cannot for a long time remain averse to the new age bio-technology by introducing GMO (genetically modified) varieties. Due to effective weed control in GMO variety seeds relative productivity is much higher. The fertility or germination of GMO seeds is also certified. Technologically it ensures much higher productivity.

16. Indian Soybean Scenario The current practice in India of farmers is using the same agricultural produce year after year as seed for fresh sowing – which leads to progressively lower productivity. The debate for introducing GMO varieties has acquired a favorable ambience with the success of BT Cotton which has led to doubling of cotton production in India in a matter of barely five years.

17. Indian Soybean Scenario Production in India has gone up this year mainly due to higher prices realized. Drought in South America followed by inclement weather prevailed in USA led to fall in world production and consequently prices soaring to all time peak. Indian farmers in line of high prices partly shifted from crops like cotton, sugarcane and coarse grains to Soybean. However, with revival of prospects of good Soy crop in Brazil, Argentina & USA, it is likely to pose a challenging situation for India to sustain both prices and production during 2013-14.

18. Indian Soymeal Scenario Let us now look at the salient features of current scenario for Indian Soymeal globally & nationally. It is noteworthy that India’s Soybean production has gone up from 9.3 MMT in 2008-09 to an estimated 12 MMT for 2012-13 crop years. The record increase in India’s production has primarily been due to sudden spurt in external demand.

19. India Soybean Producing States

20. Production Scenario in India – Region Wise The state of Madhya Pradesh accounted for 55% of area sown under soybean in 2011-12, with Maharashtra and Rajasthan accounting for 38% Soybean Area and Production Across States in 2011-12 (Government of India estimates) 20

21. Soybean Production in Major Producing State(in ‘000 M.Tons) 21

22. Area under Soybean in the Major Producing states (in ‘000 Ha.) 22

23. Arrival Trend of Soybean in Indian Marketing Yards Peak arrivals of Soybeans are in October through December. 23

24. Spotlight on Need to Increase Productivity Indian oilseeds yield per hectare is very low in comparison with World’s average • Soybean Yield 42% of World Average • Rapeseed Yield 45% of World Average • Sunflower Yield 55% of World Average • Ground Nut Yield 66% of World Average Contd…

25. Spotlight on Need to Increase Productivity There are obvious limitations in increasing additional acreage under Soyabean. Yet all out effort is needed to explore untapped areas in existing as well as new hither to unexplored regions of India. It is important to maintain higher level of production. In the existing strongholds like M.P., Maharashtra, thanks to the lure of higher prices farmers have tended to shift from other crops to Soyabean. But that is a temporary phenomenon. Contd…

26. Spotlight on Need to Increase Productivity It will be opportune to innovate incentives to enable farmers to switch over permanently to Soyabean in preference to coarse grains as it would increase their income. In each state Governments need to release new areas for additional cultivation of Soyabean as a remunerative as well as highly nutritional crop. Irrigation facilities need to be extended as they cover only 20% of land under farming. So far Soyabean has been preponderantly a rain fed crop. Contd…

27. Spotlight on Need to Increase Productivity Great potential lies in the field of increasing productivity per hectare. India’s productivity is even below half of global average and well below that of USA, Brazil, Argentina & China. This matter needs to be given top priority. If the substantial required increase in productivity is not achieved, then due to increasing domestic demand, gradually Indian SBM exportable surplus will be reduced. 27

28. Soybean Yield per Hectare in Major Producing States (Kg/ha) 28

29. Indian Soymeal Export So far Soymeal and Rapeseed meal exports have been a success story in India and exports are currently fetching around $2 billion per annum with more than 40 customer countries. 29

30. Soybean Meal Export 30

31. Indian Soybean Meal Scenario (Qty in MMT)

32. Soymeal Exportable Surplus 32

33. Indian Soymeal Export The immediate challenge is to create a special demand sector in different continents for India’s Protein-Rich Non-GMO Soymeal alongwith its added value products both for feed and food uses. This way India can make a valuable contribution to overcome global malnutrition. 33

34. Promising Domestic Demand Scenario for FEED Sector Progressively rapid increase in domestic demand brings into focus the emergent demand for feed over the next few years. The sectors in which the increase is promising are Breeders, layers, boilers, dairy cattle aquaculture & others. 34

35. Feed Dependent Sectors • Layer Self-Sufficient - 9.54 MMT • Broiler Organized - 8.40 MMT • Dairy Cattle Organized - 7.00 MMT • Breeders Organized - 1.00 MMT • Aquaculture Developing - 0.80 MMT • Other Animal Species - 0.07 MMT Feed Required in 2012 is 26.81 MMT

36. How much Feed will India need by 2020 ? (Quantity in MMT) 36

37. Soymeal Domestic Consumption (Quantity in MMT) Domestic Soybean meal consumption will, thus, more than double itself from 4.10 MMT in 2012 to 6.00 MMT in 2015 and 8.70 MMT in 2020. 37

38. Use of SBM in AQUACULTURE (Quantity in MMT) Aquaculture is a new sector for use of Soybean meal. Table below is illustrative of the giant jump from 0.16 MMT in 2005 to 1.52 MMT in 2012 and 2.23 MMT in 2015. 38

39. DOMESTIC CONSUMPTION OF SOYMEAL IN INDIA The domestic demand for Soybean meal is also rapidly increasing with growth in overall standards of livings. Domestic demand has increased from 31% to 44.5% in last 6 years. (Quantity in Lac M.Tonnes) 39

40. DOMESTIC CONSUMPTION OF SOYMEAL IN INDIA It is interesting to note that in Soyameal 55.5% is exported while 44.5% is for domestic consumption. With both increasing, the focus comes again on increasing production plus productivity per hectare. Progressively in both exports as well as domestic markets demand for more and more value-added Soya products are coming up. Thus future growth of feed industry in India would have to cater for innovative value added products. 40

41. Global Scenario – BRAZIL BRAZIL: In the aftermath of El Nino, Soybean output in Brazil went down by 9.5 MMT to 66 MMT from 75.5 MMT in 2011-12. Heavy export orders led to sharp drop in Soybean stocks globally. Many Soybean processors had to shut down their plants due to non-availability of Soybean. More favorable weather conditions are expected to enable Brazil to overtake USA in output next year. There may be switch over from Corn and Sorghum to Soybean due to higher returns. 41

42. Global Scenario - ARGENTINA ARGENTINA: Argentina also witnessed drop in production due to rain failure. Next year’s crop, thanks to expected good rain fall, is estimated to be a bumper crop of 55 MMT as against only 41 MMT in the year 2011-12 42

43. Global Scenario – SOUTH AMERICA Soybean Output in South America – Major Countries (Qty in MMT) The estimated increase in production during 2013 by 36 MMT would largely depend on conducive weather conditions during next 3 to 4 months and also achieving the targeted additional acreage of 4.5 million hectare.

44. Global Scenario - USA UNITED STATES OF AMERICA: Due to severe drought, Soybean production is decreased in USA by 7 to 8 % this year. The yield per hectare also showed a decline. For first six months of 2012-13, demand outlook looks bright, but later USA could face tough competition from expected bumper crops in South America. 44

45. Global Scenario - USA USA Soybean Supply & Demand of Sept / August (Qty in MMT) As per the latest estimate, there is shortfall of about 7 MMT in USA Crop Production from last year and is touching 10 year low levels, mainly due to insufficient rains

46. Global Scenario - CHINA CHINA: China is the biggest Soybean importer at 64% of Global Export Trade. Domestic need is 75 million tonnes of which 70% of this is met by imports. Imports in 2011-12 were even higher. China’s supply & demand scenario paints a bullish outlook for the coming year. 46

47. Global Scenario - CHINA China becoming the biggest importer with 64% of total imports, mainly due to shrinking of agricultural land and competition of better priced grains and other crops 47

48. Global Scenario - CHINA 48

49. Global Scenario Production of 9 other oilseeds is likely to be reduced by approx. 5 MMT contrary to an increase of 10 MMT in last year.

50. Global Scenario World Production of Soymeal may decline in Sept’12 - Feb’13 but likely to regain from March’13 onwards.