Lang
India’s soybean acreage is likely to decline this year as farmers in some regions shift to corn and sugarcane after achieving better returns from those crops than from soybeans, farmers and industry officials told Reuters.
Soybean is India’s main summer oilseed crop. Lower production could push the world’s largest vegetable oil importer to increase imports of palm oil, soybean oil, and sunflower oil.
Subodh Parmar, a farmer in Dewas district in Madhya Pradesh, said: “We have made almost no profit from soybeans over the past three years, so this year we decided to switch to corn, which gives better returns.”
D. N. Pathak, executive director of the Soybean Processors Association of India (SOPA), said soybean prices have been under pressure in recent months, pushing farmers to shift to other crops.
The government set the minimum price for soybeans at 4,892 rupees, or $57.29, per 100 kg, but prices since the start of the new marketing season in October 2024 have been 10% to 20% below that level.
Weak local and export demand for Indian soybean meal has pushed prices below the government-set minimum level.
Soybeans are mainly rain-fed, and monsoon rains, expected to be above average this year, are a crucial factor in determining the crop.
Madhya Pradesh in central India, Maharashtra in the west, Rajasthan in the northwest, and Andhra Pradesh and Karnataka in the south are among the leading soybean-producing states.
Soybeans contain more than 80% meal and less than 20% oil. However, domestic demand for soybean meal has declined because of cheaper availability of a byproduct of ethanol production known as distillers dried grains with solubles (DDGS), according to B. V. Mehta, executive director of the Solvent Extractors’ Association of India (SEA).
Mehta said the poultry industry, a major consumer of soybean meal, has started replacing it with DDGS over the past two years because it is more than 30% cheaper.
In Maharashtra, India’s largest sugar-producing state, abundant rains have encouraged some farmers to shift to sugarcane, a perennial crop that consumes large amounts of water, according to a Mumbai-based trader at a global trading company.
The trader said the new soybean crop appears likely to be much smaller than last year, which will certainly force India to increase vegetable oil imports.
India imports palm oil mainly from Indonesia and Malaysia, while soybean oil and sunflower oil are sourced from Argentina, Brazil, Russia, and Ukraine.
Exchange rate: $1 = 85.3850 Indian rupees.