MUMBAI: Indian farmers are likely to expand soybean planting areas by nearly 15 percent after the government raised edible oil import tax to the highest level in more than a decade, lifting domestic oilseed prices to nearly two-year highs, a trade body said.
Higher production of the main summer-sown oilseed could help India, the world’s biggest vegetable oil importer, trim costly imports from Brazil, Argentina, Indonesia and Malaysia. It could also mean a boost in exports of soymeal, a key animal feed, to Asian buyers such as Japan, Vietnam and Bangladesh.
“Soybean has been giving farmers good returns,” Atul Chaturvedi, president of industry body Solvent Extractors Association of India, told Reuters in an interview.
“Due to the duty hike, soybean prices are…significantly above the (government-fixed) minimum support price,” Chaturvedi said. “The planting area could rise by 15 percent this year.”After the hike, local soybean prices jumped to 3,895 rupees ($58.31) per 100 kg earlier this month, the highest level in nearly two years. The government-fixed support price for soybean was 3,050 rupees.
Farmers in central India have been getting poor returns from pulses and this will prompt some of them to switch to soybean, said Sandeep Bajoria, chief executive of the Sunvin Group, a Mumbai-based vegetable oil importer.