A poor rapeseed harvest looming in India could its edible oil import requirements in coming months and add support to global vegetable oil prices at a time of concern about drought damage to South American soybean harvests, Hamburg-based oilseeds analysts Oil World said on Tuesday.
Indian oilseed processors warned on January 4 that a poor rapeseed crop was likely in 2012. The extent of crop damage is unclear but larger edible oil imports are expected. "Indian rapeseed production may decline by 1 to 2 million tonnes from a year ago as a result of lower than expected plantings and yields," Oil World said. "If this materialises, Indian vegetable oil import requirements will probably increase significantly in 2012."
"The price strength in India can partly spill over to the world market, especially if we consider the pronounced slowdown in the world production growth of palm oil, the most important oil for the Indian import market." India harvested 6.8 million tonnes of rapeseed in 2011.
"Indian rapeseed crop prospects have deteriorated in recent weeks owing to drought in major producing areas," Oil World added. Indian rapeseed plantings remained significantly behind intentions in past weeks because of dry weather and it is still unclear if recent improved rain will be enough to help, it said. Indian rapeseed meal export prices have remained stable in recent weeks but Oil World noted price rises of up to 14 percent in Indian domestic rapeseed markets.
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