Soybean area in India to shrink in favor of sugarcane

Soybean plantings in India are likely to fall this year, with corn and sugarcane likely to replace them as the crops have previously provided farmers with higher returns than oilseeds, industry officials told Reuters.

Soybeans are India’s main summer oilseed crop, and lower production will force the world’s largest importer of edible oils to increase overseas purchases of palm, soybean and sunflower oils, analysts said.

Soybean prices have been under pressure in recent months on the back of a record global harvest, prompting farmers to switch to other crops. The government has set a minimum purchase price of 4,892 rupees ($57.29) per 100 kg for soybeans from farmers, but domestic prices have been trading between 10% and 20% below that since the start of the new marketing year in October 2024.

The poultry industry is a major consumer of soybean meal in India, but in the last two years it has been replacing soybean meal with distillers dry grains with solubles (DDGS), a by-product of ethanol production, as it is more than 30% cheaper than soybean meal, said BV Mehta, executive director of the Edible Oils Association of India (SEA).

“The new soybean crop is likely to be significantly lower than last year’s. This will obviously force India to increase imports of edible oils,” he said. India sources palm oil mainly from Indonesia and Malaysia, while it imports soybean and sunflower oil from Argentina, Brazil, Russia and Ukraine.

Soybean is predominantly a rainfed crop, and monsoon rains, which are expected to be above normal this year, play a crucial role in determining its yield.

Tags: sugar, soybean, India, sown area