August 19, 2010

 

Rapid oilseed crushing may trim Indian imports

 

 

Indian millers are crushing oilseeds after a spike in edible oil and oilmeal prices so aggressively that it is likely to trim additional vegetable oil imports in the high demand festival season.

 

Edible oil demand in the world's biggest importer usually goes up in August-October period due to festivals, prompting additional overseas buying.

 

"For the first time we are actively operating crushing plants in August. Certainly it will impact edible oil imports in next two months," said Yog Bhoot, an oil miller based in Amravati in Maharashtra state.

 

India buys mainly palm oil from Indonesia and Malaysia and soyoil from Argentina and Brazil.

 

According to an industry official, crushing margins have improved in the past few weeks, noting that millers are finding crushing lucrative due to higher edible oil and meal prices.

 

Margins turned negative due to lower prices of meal and oil in the first half of 2010, deterring millers from crushing.

 

Meanwhile, soyoil price in Indore spot market in Madhya Pradesh has risen by 14% to Rs 500.65 per 10kg since the beginning of the July, while soymeal has gained 8% to Rs 17,400 per tonne.

 

India's July oilmeal exports rose over a third from a year earlier, reversing the falling trend of the last eight months as a weaker currency helped boost sales to China, Japan and South Korea.

 

Soy arrivals in physical market usually fall from July, forcing millers to close operations. But this year, farmers preferred to postpone selling till prices rose and are now bringing their produce in the market, traders said.

 

Spot markets in Madhya Pradesh, Maharashtra and Rajasthan, leading soy and rapeseed producers, have seen good oilseed arrivals in August.

 

Soy is the main summer-sown oilseed crop and India produced 10.05 million tonnes in 2009-10, slightly higher than 9.91 million tonnes a year ago, farm ministry data showed.

 

As of August 12, area under oilseeds in India stood at 15.82 million hectares, against 15.28 million hectares a year ago, farm ministry data showed on Friday (Aug 13).