Traders expect Indian farmers to grow soybeans by 15% after the Mumbai government raised an import tax on edible oils to its highest level in a decade. As a result, oilseed prices in India rose to a two-year high.
Increased production of oilseeds, which are mainly grown in the summer, could help the world's largest edible oil importer to import fewer imports from Brazil, Argentina, Indonesia or Malaysia. In addition, India will probably be able to export more soybean meal to buyers in Asia, Japan, Vietnam and Bangladesh.
Soybeans were always a good source of income for Indian farmers. By raising the import duty, soybean prices have risen significantly and are now higher than the government guaranteed price. This gives the farmers an incentive to expand the cultivated area.
In earlier years, Indian soybean meal covered almost all of the needs in Southeast Asia. However, as the subcontinent has grown less soybeans in recent years, its market share has declined noticeably.
In order to encourage farmers to increase local production of soybeans and thus limit imports of edible oils, the government in Mumbai has raised import tariffs.
At the beginning of April, prices for soybeans had risen to 3,895 rupees / 100 kg, the equivalent of € 48.20 / 100 kg, the highest level in nearly two years.
Soybean cultivation in India was 10.6 million hectares in 2017, 8% less than in 2016. The reasons for the cultivation restriction were lower than state minimum prices. In most parts of India, sowing of summer crops such as soybeans, cotton and legumes starts in June when the monsoon season begins. The western states of the subcontinent Maharashtra and Madhya Pradesh in central India produce more than 80% of the total Indian soybean crop.
In 2017, a serious infestation of the cotton moth endangered the soybean harvest and more pesticides needed to be used.
