India's edible oil imports are expected to go up by at least half a million tonnes in the year ending October 2007 with the oilseeds output forecast to fall sharply on lower acreage, trade officials said on Saturday.
The Central Organisation of Oil Industry and Trade (COOIT) estimated that oilseeds output would fall to 22.6 million tonnes from 23.9 million, while the summer harvested oilseeds output will drop to 9.5 million tonnes from 10.27 million tonnes in the summer of 2006.
Traders gathered at a two-day conference in New Delhi said that the projected fall in oilseeds output and growth in consumption would lead to India buying close to 5 million tonnes of edible oil this year. "Oil imports will go up to 5.1 million tonnes from 4.4 million last year," B.V. Mehta, executive director of the Solvent Extractors Association of India, told Reuters.
Trade officials said that increasing productivity through better crop management practices was the only way to restrict the country's edible oil imports since availability of land was limited. India's oilseeds crop is highly rain-dependent. The COOIT said rapeseed output would fall to 6 million tonnes from 6.7 million tonnes, while sunflower output was seen unchanged at 1.06 million tonnes. The body estimated groundnut output at 1.85 million tonnes.
Trade officials said oilseeds output would be hit as farmers turned to more profitable wheat and pulses. The Farm Ministry said the area coverage under summer-harvested oilseeds was estimated at 9.17 million hectares (22.65 million acres), down from 10.5 million a year ago.
India harvests its summer oilseeds in March and April. It produces two oilseed crops a year. COOIT also revised its estimate for the winter-harvested soyabean crop for 2006/07 to 7.6 million tonnes from 7.2 million tonnes on higher arrivals in the market, an industry official said.
Trade officials also said that two to three spells of rain had damaged the oilseeds crop in some regions, but would help the overall output. Most parts of northern India were lashed by rains and gusty winds in February and March which weather officials said were heavier than normal at this time of the year.
Sandeep Bajoria, a leading edible oils trader, said he was expecting a rise in the prices of edible oil by June to July. "The domestic prices will increase by about 1,000 rupees to 1,500 rupees per tonne," he told Reuters. The current soyaoil price is about 44,500 rupees ($1,012.51) per tonne. India is one of the world's leading edible oil importers. It buys palmoil from Malaysia and Indonesia and soya oil from South America.
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