Farm state lawmakers, allied with House Democratic leaders, on July 26 defeated a proposal for a major overhaul of traditional farm programs that would have pared subsidies to big growers and spread benefits more broadly. The 309 to 117 vote came on the first day of debate on a multiyear farm bill.

The amendment was billed as this year’s major challenge to an entrenched farm-subsidy system. The defeat was a setback for a coalition of environmental organizations, anti-hunger groups and religious leaders who favor shifting more funds to conservation, nutrition and other priorities.

India’s Genetic Engineering Approval Committee (GEAC) approved imports of soyoil derived from round-up-ready soybeans for consumption after refining, the only biotech food product approved for import to date, according to a USDA attaché report.

The only biotech food product allowed for import into India is soybean oil derived from round-up ready soybean, USDA said.Although India exports cotton and cottonseed meal, the biotech issue has not come to the forefront.However, India does not export any significant quantity of cotton or cottonseed meal to the United States.Food aid received by India is now mostly confined to refined soybean oil from the United States under PL 480 Title II for which the requisite GEAC approval was obtained in 2002.

As India is one of the leading importers of vegetable oils, including soybean oil, USDA said concerns about high domestic vegetable oil prices forced the government to give a special exemption to commercial imports of soybean oil derived from roundup ready soybeans for imports until December 31, 2007.No other biotech food products are officially permitted for commercial import or are awaiting approval for import to date.

Last week, as part of measures to rein in prices of essential food items, India’s government cut import duty on edible oil by up to 10 percentage points. The customs duty on crude soyoil has been reduced to 40% from 45%. Meanwhile, palm oil has been reduced to 45% from 50%, while on refined palmolein refined, bleached, deodorized it is now 52.7% from 57.5%, a spokesperson for the Central Board of Excise and Customs said.

Officials from India’s edible oil industry suggested that the move could pave the way for a decline in retail prices by about Rs1 a kg in soyoil and palm oil.

“International prices have gone up in the last one month by over $100 a tonne,” B.V. Mehta, executive director of the Solvent Extractors Association of India said. “To offset that effect, the government it seems, has decided to give relief to consumers.” However, he cautioned that prices of palm oil, RBD palmolein, soyoil and sunflower oil would only ease if exporters do not hike their prices and the entire benefit accrues to India.

New standards for cooking oil are due to take effect soon in China, a government official said last week. “We are looking at a total of 92 standards for the cooking oil industry and we expect the standard regulatory authority to issue some shortly,” said Du Zheng, director of the Standards and Quality Centre of State Administration of Grain. “Thirty of the standards are almost decided upon, 10 of which address the edible oil sector.”

“The new standards will help guide manufacturers and ensure the market as a whole is well regulated. Of course, since the manufacture of cooking oil is complicated, the healthy development of the segment will also depend on self-regulation,” Du said.

• Iowa Renewable Energy started producing biodiesel in Washington, Iowa. The 30 million gallon biodiesel plant processes raw soyoil.

• Scott Petroleum Biodiesel of Greenville, Mississippi started producing at its 20 million gallon facility. The plant cost more than $22 million to build, according to company sources. The feedstock will be soybean oil.

• SeQuential-Pacific Biodiesel LLC, a subsidiary of Pacific Biodiesel, has started to expand its 1 million gallon facility in Salem, Oregon to a production capacity of 5 million by summer 2008.

• Biodiesel producer Renewable Energy Group started production at its 30 million gallon Iowa Renewable Energy LLC multi-feedstock plant in Washington, Iowa. The state’s biodiesel production capacity is now seen above 225 million gallons per year.

• Officials recently broke ground on the Maple River Energy biodiesel plant near Galva, Iowa. The plant will produce 5 million gallons of biodiesel a year processing 3 million bushels of soybeans. USDA rural development provided a $10 million guaranteed loan for the new plant.

The soy complex was mostly higher on July 26. Soybeans and meal close higher, but soyoil settled in negative territory amid a slide in petroleum prices. While growing conditions are not ideal and many areas would like to have more moisture, the soybean crop is in above-average condition and has dodged hot temperatures except for the western reaches of the Corn Belt. The soybean market likely will work lower over the next 30 to 60 days if growing conditions are favorable during the critical month of August as the market also will have to contend with storing and financing a record large carryout. Declines in soybean prices likely will be most pronounced on the product side in soymeal since soyoil prices are largely tied to the energy markets. August bean futures closed up $2.39, finishing at $301.85; September was $2.57 higher, closing at $304.88; and November was up $2.66, ending at $311.03. August meal increased $2.98 closing at $239.97; September was $2.54 higher, finishing at $242.84; and October gained $2.76 to close at $245.37. August oil closed $0.66 lower to finish at $806.66; September was down $1.54, closing at $812.17; and October lost $2.43, ending at $817.69.

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