MUMBAI (Reuters) — Farmers in India are likely to boost the amount of land devoted to growing soybeans by up to four percent in the crop year that begins in July, as they look to profit from a rally in prices for the oilseed, an industry body said.
That would help the world’s top importer of edible oils to cap overseas purchases and could boost oilmeal exports to Asian countries.
“Farmers are quite interested in soybeans due to the higher prices. We can see at least a two to four percent rise in area,” said Rajesh Agrawal, chief co-ordinator at the Soybean Processors Association of India.
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Local prices have risen 28 percent since the start of 2013-14 marketing year on Oct. 1 due to climbing demand from the poultry industry for soybean product soymeal.
Soybeans are the main summer-sown oilseed crop in the south Asian country, with farmers last year cultivating a record 30.2 million acres.
But despite that record area, output fell 4.4 percent from the year before to 10.2 million tonnes as heavy rainfall damaged crops in some areas, according to estimates from the Central Organisation for Oil Industry and Trade.
“This year (planted) area will rise mainly in Maharashtra and the southern states. Madhya Pradesh is quite saturated,” said Agrawal, adding that in some areas there could be a shortage of quality seeds after rains affected the standard of last year’s harvest.
The central state of Madhya Pradesh is the country’s top soybean producer, followed by Maharashtra state in the west.
The possible emergence of the El Nino weather phenomenon could affect sowing patterns, however.
India is likely to receive below-average rainfall in 2014 if El Nino hits the four-month-long rain season, the government’s weather office said last month.
“A drop in rainfall due to El Nino could influence sowing patterns,” said Vijay Data, president of Solvent Extractors’ Association.
“We are advising farmers to sow early, so even if there is a drop in rainfall, its impact would be minimal on sowing (volumes).”
Soybean is mainly a rain-fed crop in India and most farmers begin sowing in June after the arrival of the monsoon. Supplies of the new-season crop start arriving in markets from October.
India’s edible oil imports in the year to Oct. 31, 2014 have been slated to rise 4 percent from a year earlier to 10.8 million tonnes.
The country mainly buys palm oil from Indonesia and Malaysia, with a small quantity of soyoil from Argentina and Brazil.
India’s soymeal exports were estimated to drop 30 percent to three million tonnes in the year to Sept. 30.
India is Asia’s top soymeal exporter. Its product preferred to Latin American supplies because it does not use genetically modified beans and due to lower transportation costs.
“Last year, India could have harvested record (soybean) crop, but erratic weather spoiled prospects. This year, farmers are enthusiastic, but let’s see how the weather pans out,” Isha Trivedi, an analyst at Phillip Commodities India Pvt Ltd.
