Untimely Rain in India Could Lead to Increase in Palm Oil Other Edible Oil Imports

NEW DELHI: India’s rapeseed crop could gain in terms of oil content from a recent rainy spell in the northwest, but if the rain continues much longer it could hurt output and increase the chances of edible oil imports hitting a record high for the fourth year.

“Recent rains have brought down temperature to a favourable level that promises better oil yield but we still have to watch how the temperature remains until the end of this month,” said D.K. Yadav, head of seed science at the Indian Agricultural Research Institute (IARI).

Harvesting of rapeseed will start in the next 10 days and if hailstorms materialise, the crop could be badly damaged. Continuous rain would also increase the threat from pests.

“Untimely winter rains didn’t cause any major havoc, though if it rains for the next couple of days uninterruptedly, then God knows what miseries are in store for us,” said Mani Ram Jat, a 47-year old farmer from Hanumangarh district of Rajasthan, the main rapeseed-producing province of India.

Lower output of the crop could push up demand for edible oil imports by the world’s top importer to a record high, to the benefit of cheaper palm oil from Indonesia and Malaysia.

Industry officials at a recent high-profile conference said edible oil imports could hit 12.5-13 million tonnes in 2014/15. They rose for the third year in a row to 11.6 million tonnes in the year to October 2014.

India meets 60 percent of its annual edible oil needs of 18-19 million tonnes through imports.

Since India’s rapeseed crop has the highest oil content, its size has a big bearing on the South Asian country’s demand for edible oil imports, which is increasing anyway due to growth in the population and the economy.

Growers planted rapeseed over 6.5 million hectares (16 million acres) in the current crop year to June, an 8.5 percent drop from the previous year because of poor soil moisture in the main growing areas in the northwest.

Traders have forecast rapeseed output in a range of 6.5 to 7.0 million tonnes against 7.4 million tonnes in 2013/14.

Rapeseed oil supplies could be 2.3 to 2.4 million tonnes in 2014/15, said Deepak Kanda, president of the Shri Ganganagar Oil Millers Association in Rajasthan. Local supplies stood at around 2.7 million tonnes in 2013/14.

Lower Indian supplies could support benchmark Malaysian palm oil prices, which have risen 5 percent this year after a drop of almost 15 percent in 2014.- Reuters

 

Source : The Star

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