May 22, 2007

 

Indian oilmeals and oilseeds growth to depend on prices, exports

 

 

India's winter-harvested oilseeds may increase on the side of good oilmeal exports along with good rains, traders said on Monday (May 21).

 

The traders stressed prices offered for Indian meal, mainly soymeal, were attractive and could draw farmers of cotton and sugar cane to plant oilseeds in the coming season.

 

Rajesh Agrawal, spokesman of the Soybean Processors' Association of India said exports of soymeal and rapeseed meal exports have been buoyant as the oil complex has been bullish because of biodiesel.

 

Agrawal said acreage for oilseeds might rise to a million hectares in the western state of Maharashtra and the southern states of Andhra Pradesh and Karnataka. Total area for oilseeds, according to a consulting firm, is seen to reach 1.3 million to 28 million hectares starting October 2007.

 

The country's oilseeds production in the year that ends in September has dropped to 23.3 million tonnes from 27.98 million a year earlier following poor rains and a lower area under the cultivation. The harvest ended in April.

 

Agrawal said cotton and sugar cane farmers faced problems because of bumper output and might shift to soybean, where returns were much higher.

 

He added soya have been profitable for farmers because of Indian soymeal and its area could reach 8 million hectares from the current 7.5 million hectares depending on the monsoon rains.

 

India's annual oilmeal exports which ended March this year rose 17 percent to 5.16 million tonnes, according to Solvent Extractors' Association of India trade body.

 

Soymeal exports during the period have jumped to to 3.6 million tonnes from 3.4 million a year earlier while rapeseed meal exports nearly doubled to 970,725 tonnes from 533,275.

 

The trade body said exports of oilmeal were a record in both quantity and value, generating revenues of 43 billion rupees (US$1 billion).

 

The biggest buyer of India's oilmeal was Vietnam, which increased imports by 41 percent to 1.25 million tonnes over the year before, followed by South Korea at 1.15 million tonnes and Indonesia at 727,225 tonnes.

 

India's weather department foresees the June-September monsoon will be 95 percent of the long-period average with rains expected to hit the country on May 24, a week ahead of the normal date of June 1.

 

The country's oilseeds crop is highly rain-dependent because of a lack of irrigation and water in most of growing regions.

 

Traders said sales of soymeal have tapered off, barring some exports in containers to Vietnam and Indonesia at around US$295 per tonne cost and freight.

 

The government has already increased the support price last week it would pay to farmers for the oilseeds crop to be harvested in November. But traders said this would not be of much help in increasing output as market prices were much higher than the government-set prices.