India set to plant more land with soya bean crops as prices rally

Mumbai

INDIA is set to grow soya beans 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 Brazil, Argentina, Indonesia and Malaysia.

It could also help boost Indian exports of animal feed ingredient soya meal to places such as Bangladesh, Japan, Vietnam and Iran.

"At current prices, soya beans are more lucrative than other crops. We will see a shift towards soya beans from cotton and pulses," said Davish Jain, chairman of the Soybean Processors Association of India (Sopa).

Local soya bean prices have risen nearly 14 per cent to 3,716 rupees (S$73.51) per 100 kilograms since the start of the 2018 crop year on Oct 1, boosted after India raised the duty on importing soya oil, palm oil and other cooking oils.

Soya beans have been cultivated on 10.8 million hectares in the 2018 crop year, up 6.7 per cent from the year before, according to data compiled by Sopa.

Mr Jain did not give an exact estimate on how much land he expected to be planted with soya bean crops in the 2019 crop year.

The appeal of sowing soya bean fields could also be boosted by forecasts the next monsoon will arrive late and deliver less rainfall than average.

"Soya bean is a sturdy crop. Even if it encounters adverse weather conditions, then farmers would not end up with total losses like other crops," Mr Jain said.

Most Indian farmers typically begin cultivating soya beans, 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 per cent of the country's total soya bean output. Both states could receive lower-than-normal rainfall in 2019, according to private weather forecaster Skymet.

The greatest rise in land for soya bean cultivation could be in Maharashtra, where farmers were not happy with returns from cotton, said Govindbhai Patel, managing director of trading firm GG Patel & Nikhil Research Company. "Soya bean doesn't need too much rainfall. It needs timely rainfall for better yields," he said. Soya bean prices have also been buoyed by growing Iranian appetite for imports of Indian soya meal, said a Mumbai-based dealer with a global trading firm. REUTERS