India eyes L. America, Myanmar land for oilseeds

By Mayank Bhardwaj

NEW DELHI, Sept 2 (Reuters) - Some of India's top vegetable oil firms plan to lease or buy land in Paraguay, Uruguay and Myanmar to grow oilseeds and lentils as farmland shrinks in the South Asian nation, a top trade official said on Tuesday.

Despite being the world's second-biggest grower of rice and wheat and the leading importer of vegetable oils after China, India has recently been pinched by rising global food prices.

Policy makers fear climate change could squeeze the amount of land available to farmers even further.

"We have formed a consortium of 14 vegetable oil companies which is in talks with the governments of Paraguay, Uruguay, and Myanmar for buying large tracts of land for cultivating soybean, sunflower and pulses," Ashok Sethia, president of the Solvent Extractors' Association of India, told Reuters.

India banned exports and cut import taxes on a clutch of farm products to ensure supplies for its more than one billion people when food prices soared globally last year and early in 2008.

Analysts say factories and property developers are buying up farmland, while farm output is also restricted by the poor development of irrigation facilities across much of the country.

In a sign of its vulnerability when things go wrong, hot weather in 2006 cut wheat output and forced India to import more than 7 million tonnes of the grain over two years at high prices.

"There is too much pressure on our farmland and the government knows it has a difficult task ahead in maintaining food supplies," Sethia said.