``It cannot be sustained at these levels. There will be an unrest in thecountry...The government has to take some measures to keep farmers happy.''Traders said farmers in the state of Madhya Pradesh, India's soybean bowl,had already begun demonstrating with demands that the government stick toits pre-election promise of guaranteeing a procurement price of Rs 8,450 pertonne.

India is set to export about two million tonnes of soymeal crushed from itswinter crop of about five million tonnes to Asian countries, includingJapan, Indonesia and South Korea, in the year beginning in October, theysaid.

In the absence of Chinese demand for soymeal, prices for Indian soymeal areexpected to drift lower from current levels of $178/$179 per tonne, C&FSouth East Asia, for December shipment.

India is also suffering from a slow start in the Indian export season due torains and a change in farm financing, which has led its customers, includingJapan and Indonesia, to South America to cover needs by the end of 1999,they added. ``Prices (for Indian meal) are going down. Demand is very, verysluggish,'' said another trader. ``Japan bought a little, but I thinkthey're through to December.

Indonesia bought a little, yet they're also through up to December.''Reflecting a global oversupply of soybeans and a massive imports ofvegetable oils into India, Indian soybean prices have dropped to well belowRs 8,000 per tonne, compared with around Rs 9,300-9,500 a year earlier.Prices were seen between Rs 7,800 and 7,900 on Friday,after a small reboundon Thursday between Rs 7,500 and 8,000.

On Thursday, the Soybean Processors' Association of India (SOPA) said thestate government was about to start buying the beans at the guaranteedprice, with financial support of Rs 60 million from the national government.Traders in Singapore were sceptical if the plan would work.

The government had no infrastructure to buy soybeans, let alone warehouses,they said, while the budget would also be too small and only buy around7,000 tonnes.

Traders said the Indian government could not afford having tens of millionsof farmers angered and without the means to cover their basic needs. Farmersin Madhya Pradesh, in dire need of cash, have been forced to sell soybeansat low prices since the start of harvesting season late in October, theysaid.

``I doubt whether they (the Indian government) have the financial muscles tobuy any big quantities,'' the first trader said.``Farmers will have todemonstrate. It's already happening...It's a question of if they'll gethigher beans prices and higher oil prices, or higher beans prices and noexports.''