December 15, 2009
Poor weather dims hopes for India oilseed crop
Weather setbacks are continuing to hurt prospects for all India's main oilseed crops, leaving the country ever-more reliant on palm imports to meet its vegetable oil needs.
The cotton crop in the world's fifth-biggest oilseed producer was damaged by tropical storms last month, which landed heavy rains on some areas while plants were in the sensitive phase when bolls are open.
Meanwhile, the hangover from a weak monsoon has dented hopes for peanut, rapeseed and soybean crops, the US Department of Agriculture said, unveiling a cut of 1.1m tonnes to 32.25m tonnes in its forecast for India's 2009-10 oilseed output.
The weak domestic harvest was likely to raise oilseed imports which, in crude form can still be shipped in at zero duty, with palm oil likely to lead the trend.
"Palm oil will be favoured by its widening price discount, currently US$130-US$150 per tonne, to soyoil," the USDA said.
The department forecast palm oil imports hitting 6.6 million tonnes in 2009-10, which it termed "a record", although its own data show a higher figure, of 6.87 million tonnes, for 2008-09.
The prospects of rapeseed, of which India is the world's fourth-biggest producer, had suffered the most, thanks in the main to "negligible rainfall since July" in Rajasthan, where 40-45% of the domestic crop is grown.
"The supply of irrigation water is also very low due to poor replenishment from last summer's monsoon," the USDA said, adding that the crop, for which the government has maintained its guaranteed price, might lose out to wheat, for which support had been raised.
The forecast for rapeseed output was cut by 500,000 tonnes to 6.6 million tonnes.
The harvest estimate for soy was reduced by 200,000 tonnes to 8.8 million tonnes, reflecting "less favourable moisture conditions" in Maharashtra, the second biggest producing state.
For cottonseed, the output estimate was cut by 200,000 tonnes to 10.1 million tonnes, lower than the 10.4-million-tonne figure hit two years ago despite record plantings.
"The reduction in crop is expected to moderate the feed use and crushing of cottonseed," the USDA said, in a follow-up report to the key world crop supply and demand data published last week.