March 20, 2007

 

India's rapeseed procurement off to slow start

 

 

Rapeseed procurement by India's state-run National Agricultural Cooperative Marketing Federation (Nafed) has got off to a slow start with rains and a general drop in output slowing market arrivals, a senior official of the cooperative said Monday.

 

Nafed has so far been able to purchase only 3,000 tonnes of rapeseed from the 2007 crop, the official said.

 

India is one of the largest importers of edible oils in the world and the quantum of annual imports depend, to a large extend, on stock held by government agencies such as Nafed.

 

"The procurement process this year (has been) slow as the open market price of mustard is above the government-set intervention price of Rp1,715 per 100 kilo grammes in many producing regions," the official said.

 

The government buys the crop at a predetermined intervention or support price and later sells it to local edible oil manufacturers.

 

The annual procurements are also part of government efforts to support prices in plentiful years so that farmers get sufficient returns despite supply pressure during peak harvesting months.

 

Indian edible oil imports declined in the marketing year to October 2006 to 4.4 million tonnes from 5.1 million tonnes imported in the previous year, as oil manufacturers crushed large volumes of rapeseed purchased from Nafed last year.

 

The Nafed official said weather this year has been adverse in many parts of Northern India, with rains slowing the arrival of rapeseed into the market.

 

In 2005 and 2006, Nafed purchased around 2 million tonnes of rapeseed each as market prices dropped way below government-set intervention prices.

 

Procurement this year could be much lower because of a fall in local output, he said.

 

According to industry estimates released Friday, India's rapeseed output in 2007 is estimated at 6.0 million tonnes, down from 6.8 million tonnes in 2006 because of a shift in acreage from oilseeds to pulses and wheat.

 

However, Nafed still has stocks of 800,000 tonnes to 1 million tonnes of rapeseed from previous years.