Increased production of India's main summer-sown oilseed could help the world's biggest vegetable oil importer trim costly purchases from Malaysia, Brazil, Argentina and Indonesia. India imports most of its palm oil from Malaysia and Indonesia.(Filepic shows soybean plantation in in Rio Verde, Goias state, Brazil, January 31, 2019.)
MUMBAI: India is set to grow soybeans on more land in the 2019 crop year as higher prices for the oilseed push some farmers to switch from cultivating competing commodities such as cotton and pulses, an industry official and dealers told Reuters.
Increased production of India's main summer-sown oilseed could help the world's biggest vegetable oil importer trim costly purchases from Malaysia, Brazil, Argentina and Indonesia. India imports most of its palm oil from Malaysia and Indonesia.
It could also help boost Indian exports of animal feed ingredient soymeal to places such as Bangladesh, Japan, Vietnam and Iran.
"At current prices, soybeans are more lucrative than other crops. We will see a shift towards soybeans from cotton and pulses," said Davish Jain, chairman of the Soybean Processors Association of India (SOPA).
Local soybean prices have risen nearly 14 percent to 3,716 rupees ($53.31) per 100 kg since the start of the 2018 crop year on Oct. 1, boosted after India raised the duty on importing soyoil, palm oil and other cooking oils. Soybeans have been cultivated on 10.8 million hectares in the 2018 crop year, up 6.7 percent from the year before, according to data compiled by SOPA.
Jain did not give an exact estimate on how much land he expected to be planted with soybean crops in the 2019 crop year.
The appeal of sowing soybean fields could also be boosted by forecasts the next monsoon will arrive late and deliver less rainfall than average.
"Soybean is a sturdy crop. Even if it encounters adverse weather conditions, then ... farmers would not end up with total losses like other crops," Jain said.
Most Indian farmers typically begin cultivating soybeans, cotton and pulses, which are rain-fed crops, in June after the arrival of the monsoon.
The western state of Maharashtra and central India's Madhya Pradesh account for more than 80 percent of the country's total soybean output. Both states could receive lower-than-normal rainfall in 2019, according to private weather forecaster Skymet.
The greatest rise in soybean area could be in Maharashtra, where farmers were not happy with returns from cotton, said Govindbhai Patel, managing director of trading firm G.G. Patel & Nikhil Research Company.
"Soybean doesn't need too much rainfall. It needs timely rainfall for better yields," Patel said.
Soybean prices have also been buoyed by growing Iranian appetite for imports of Indian soymeal, said a Mumbai-based dealer with a global trading firm. ($1 = 69.7100 Indian rupees) - Reuters
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