Agri Business

Kharif Outlook: Soyabean, groundnut are the season’s favourites for growers

Our Commodities Desk Chennai | Updated on June 10, 2021

Surge in oilseeds prices this year seen an encouraging trend along with Govt initiatives


Probably, for the first time in the last few years, stakeholders in the oilseed sector are upbeat about the Kharif season sowing prospects, expecting a rise in the acreage.

There is everything rolling in favour of oilseeds this year that could lure growers to planting crops such as soyabean, groundnut, sesame or sunflower.

Thanks to shipment problems in Brazil and China’s unending appetite for soyabean, edible oil prices have nearly doubled currently compared with last year.

According to Solvent Extractors Association of India (SEA) data, landed prices of palm group of oils have increased by 76.5-93.5 per cent, degummed or crude soyabean oil rates by over 83 per cent and those of crude sunflower oil by over 76 per cent currently compared with the year-ago period.

At processors gates, barring groundnut oil, prices of cooking oils - excluding taxes - have increased between 65 per cent and 73.5 per cent. Groundnut oil rates have gone up by 15 per cent compared with the same period a year ago.

Thus, crushers and edible oil refiners are certain that farmers will swing towards oilseeds this year. On Wednesday, the Centre announced the minimum support price (MSP) for Kharif crops with oilseeds rates being hiked by ₹70 to ₹3,950 a quintal for soyabean.

The MSP for sesamum has been increased by ₹453 to ₹7,307, while for groundnut it has increased by ₹225 to ₹5,550. The MSP for sunflower is up ₹130 at ₹6,015.

In addition, the Centre has been coming out with policies and other measures, such as free distribution of seed mini-kits for intercrops to promote planting of oilseeds.

One of the major reasons for it to encourage farmers to take up oilseeds cultivation is that India imports nearly two-thirds of its edible oil demand with over ₹80,000 crore foreign exchange spent on it.

The Centre is encouraging oilseeds cultivation also because the country has become surplus in foodgrains from its initial efforts to become self-sufficient to meet any emergencies.

The Centre has set a tentative target of producing 26.2 million tonnes (mt) of oilseeds during the current Kharif season. This has been set despite the target being missed last year.

In order to achieve, it is looking to increase the area under kharif oilseeds by 6.37 lakh hectares (lh) by distributing free seed min-kits of higher-yielding soyabean and groundnut varieties. This, the government hopes, will increase the production by 12 lakh tonnes, yielding over 2.4 lakh tonnes of edible oil.

According to the third advance estimate, oilseeds production is estimated at 24.55 mt last Kharif season against the 25.54 mt target. For this year, oilseeds such as soyabean and groundnut have emerged as favourites among farmers for sowing.

BV Mehta, SEA Executive Director, told BusinessLine that the price farmers have seen in the last few months for oilseeds will encourage them to opt for them in kharif sowing.


Growers may take up crops such as groundnut in Saurashtra, soyabean in Maharashtra and Madhya Pradesh, and castor in Gujarat and Rajasthan. In Madhya Pradesh, farmers are inclined to plant soyabean despite suffering losses last year due to unseasonal rains and fungal attacks.

Stating that the oilseeds area will expand, Mehta said it would be difficult to quantify how much the area will increase, as some crops are competing with each other. Personally, he feels that the area under oilseeds may increase for groundnut, soyabean and castor by 5-10 per cent

The Soyabean Oil Processors Association expects the area under soyabean by 5-7 per cent, said D N Pathak, Executive Director of the oil trade body from Indore.

Ample seeds available

Going by Government data, availability of seeds seems to be enough to meet the requirement for the sowing season.

During the “National Conference on Agriculture 2021” on the prospects of kharif crops, the requirement and availability of seeds for oilseed crops was discussed. It was revealed that barring soyabean seeds, availability of all others was in excess of the requirement. (See table)

On soybean seeds, the Centre said that the deficiency will be met from private seed companies and seeds saved at farms.

Towards ‘Atmanirbhar’

To become ‘Aatmanirbhar’ in oilseeds, the Union Agriculture Ministry discussed a special Kharif plan in detail with the State governments in a webinar in April and also at the Kharif conference on April 30. These deliberations led to the formulation of area and productivity enhancement for soyabean and groundnut with a focus on high-yielding varieties of seeds to be provided free of cost under the National Food Security Mission (Oil Seeds and Oil Palm).

In fact, the April 30 Kharif conference termed oilseeds as a priority now, and suggested taking them up as intercrop with pulses, cotton, maize, and millets, besides improving varieties of soyabean, groundnut, sesame, and sunflower for the Kharif season.

The centre is looking at expanding the area under soyabean in non-traditional areas such as Bihar, Jharkhand, Odisha, Manipur and other North-Eastern states.

Apart from this, 63 potential districts in Andhra Pradesh, Bihar, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Punjab, Tamil Nadu, Telangana, and West Bengal are to be targeted for sunflower cultivation. Another 59 potential districts in Gujarat, West Bengal, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh are targeted for sesamum planting.

One of the strategies will be replacing upland/low-yielding paddy areas with oilseeds.


Sudhakar Desai, President of Indian Vegetable Oil Producers Association (IVPA), said measures should be taken to increase the area and production of groundnut because it is a non-import substitute oil. “Even a higher MSP in the medium term would be good for this crop,” he said.

With market prices of soyabean (and also rapeseed - a rabi crop) higher than MSP, floor prices don’t matter much, he said.

In Karnataka, sowing of oilseeds such as groundnut, soyabean and sunflower has begun with the monsoon covering the entire State.

In central Karnataka, farmers are showing more interest in groundnut and sunflower, whereas in the northern districts, soyabean is the preferred crop.

“There is a higher level of interest among farmers for oilseeds as the prices are good and the acreages could rise,” officials at the Karnataka Oilseeds Federation (KOF) said. The increase in MSP would also aid the trend. KOF is supplying about 50,000 quintals of groundnut seeds to farmers across the state

In Gujarat, farmers are likely to take increased interest in oilseeds cultivation, primarily due to higher realisations from the oilseeds crops last year.

Farmers are likely to take up groundnut and soyabean crops at the beginning of the kharif sowing. State government’s data show that groundnut has been planted on 10,214 hectares, while soybean on 36 hectares in the first week of kharif sowing. Gujarat is the top grower of groundnut, but over the past few years soyabean is also gaining traction.

Among other oilseeds, sesame seed is also a preferred crop as its prices have ruled above the MSP.

Oilseeds exporter Sanjiv Sawla, Partner at M Lakhamsi & Co, told BusinessLine that newer areas are emerging in other parts of the country for groundnuts.

“Groundnut has fetched a better price for farmers last season. Other than Gujarat newer areas of southern Uttar Pradesh and northern Madhya Pradesh, Rajasthan may see a trend towards groundnut,” he said.

On the other hand, some growers could be shifting to soyabean from groundnut in Gujarat owing to price variation in the two crops.

Groundnut sowing touched a record 20.72 lakh hectares in Gujarat last year against a three-year average of 17 lakh hectares. Soyabean was planted on 1.28 lakh hectares followed by sesamum on 1.14 lakh hectares last year.

IVPA’s Desai said India produced only a negligible quantity of sunflower oil currently and most of it used in the country is imported. “There should be an active scheme to promote sunflower cultivation in different agro-climatic conditions where it can grow. Sunflower MSP can be even higher so that farmers are encouraged to try the crop,” he said.

India needs to have more dynamic MSP-consumer price-linked import duties for oilseeds so that it can drive the country towards achieving self-sufficiency in the edible oil sector, the IVPA President said.

With inputs from AJ Vinayak, Mangaluru; Vishwanath Kulkarni, Bengaluru; Rutam Vora, Ahmedabad; TV Jayan, New Delhi; Radheshyam Jadhav, Pune; and Subramani Ra Mancombu, Chennai

(This is part of a series of Kharif Outlook reports that have been appearing in these columns since last week. The reports will continue to appear over the next few days.)

Published on June 10, 2021

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