Indian edible oil importers may have more options as global soybean production is expected to increase.

With international agencies forecasting world production of soybeans to grow by more than 6 percent this year, India’s edible oil industry is likely to have more import opportunities. Some industry executives believe soybean oil could compete with sunflower and palm oil for market share. Various agencies estimate the global soybean crop in 2024 between 392 and 398 million tons (mt).

BMI (a Fitch Solutions company) said in its commodity price forecast that it expects soybeans to grow 6.3 percent annually. production 398.2 million tons in the period 2023-24 (July-June). The January report of the United States Department of Agriculture (USDA) estimates world production of soybeans at about 398.97 million tons, while the grain market report of the International Grains Council (IGC) estimates 392 million tons.

Recovery in South America

Most reports attribute the increase in soybean production to a strong recovery by major producers in South America. The Commodities Outlook 2024, the economic and financial analysis of Dutch international financial company ING Think, noted that Argentina’s production is expected to recover from last season’s drought. Domestic production is expected to increase from 23 million tons a year earlier to 48 million tons. Even the IGC report linked its production forecast to Argentina’s recovery.

ING  thinks production in Brazil will reach another record high for another season at 163 million tons, up 5 million tons as farmers find soybeans more attractive than corn. However, this crop comes with risks as some key growing areas have recently experienced dry conditions. BMI said Brazil is poised to make the most significant impact, with a second consecutive record harvest of 161 million. The USDA cut Brazil’s soybean production forecast by 4 million tons to 157 million tons as hot and dry weather in recent months affected yields in key growing regions..

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