Now that the calendar has flipped to April, news for the grain market may be muted as we head into spring planting season. A few things did catch my eye this week in the search for fresh global demand news which may help support grain prices in the short term.

What’s happened

If you follow my writings, you know that I am quite intrigued by India, their growing population, and a growing demand for proteins and food resources. Back in December, I provided context regarding India’s growing need for protein demand, and overall food demand as their population booms.

While the following news is quite frankly not a major market mover in the short term, it does continue to set the tone for potential growing demand for American agricultural exports.

From a marketing perspective

Corn, soybeans and wheat each received friendly tidbits of demand news this week coming from India.

Soybean oil

Soybean oil demand in India is slowly trending higher. Traditionally, India has been a large purchaser of palm oil and sunflower oil. However, when the war in Ukraine began two years ago, India began to quietly open its doors to larger imports of soy oil. Much of the soybean oil imports are said to be from South America, with the United States slowly gaining market share.

Related:India: The new global commodity powerhouse?

In January, the Foreign Agricultural Service wrote that, “Soybean oil is India’s second most imported oil, totaling $4.8 billion and comprising more than a quarter of vegetable oil imports in FY 2023. The United States has occasionally been a supplier of soybean oil to India when market conditions are favorable, including in 2022, but imports face stiff competition from other substitutable oils like palm and sunflower, and from imports from India’s traditional soybean oil suppliers, Argentina and Brazil.”

Then this week, according to an article from Reuters, it was announced that Indian soybean oil imports increased 27% during the month of March (up from the month prior), to 220k million metric tons. In addition, March sunflower oil imports were at 448k metric tons and up 51% from Feb. The combined total edible oil imports for India during the month of March was said to be the largest amount in six months.

Wheat

Wheat production in India is pegged at 110.55 MMT according to the most recent USDA WASDE report. India is the world’s third largest producer of wheat behind China and the European Union. Everything that India grows, they use domestically. India’s total demand for wheat is pegged at 111 MMT.

This week, the USDA Foreign Agricultural Service post in India has forecast that India may import 2 MMT of wheat in 2024-25 despite record production due to strong demand and low stocks within India. While it’s likely that Russia will gain a large portion of those expected sales, it does bode well for overall global demand for wheat as global ending stocks of wheat continue to trend lower.

Ethanol

Not corn, but ethanol imports are also on the rise in India. In January, the Foreign Agricultural Service wrote: “Ethanol is imported by India for medical and industrial uses, and the United States has long been the top supplier, most recently capturing 84% of the import market in fiscal year 2023. Importing ethanol for fuel blending is prohibited. Ethanol is used in manufacturing to produce disinfectants and hand sanitizers as well as solvents, carriers in foods and cosmetics, commercial deicers, pharmaceuticals and organic chemicals.”

Prepare yourself

The demand news from India overall remains encouraging and is a story that suggests additional demand growth in the future. Political hurdles to clear regarding trade with India, include existing tariffs on some agricultural products. Additionally, India is a member of the BRICS economic group, which also includes Brazil, Russia, China and South America.

Finding new growth and inroads for American agriculture demand is paramount. As I learn more about India, and potential growing demand there, I see hope for demand for U.S. ethanol, wheat and soybean oil.

Reach Naomi Blohm at 800-334-9779, on X (previously Twitter): @naomiblohm, and at [email protected].

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