The Hindu Business Line : Oilseeds crop looks to another spell of rain

OILSEEDS crop will require another spell of rain in the growing areas to ensure good yield. Though harvest of oilseeds such as soyabean and groundnut has begun in some areas, a major portion of the crop is likely to arrive only towards the end of next month, according to industry players.

"Another spell of rains is crucial especially for soyabean and groundnut crops that have been sown late. The crop is at the pod stage and a good yield can be guaranteed only if there is rain," said Mr B.V. Mehta, Executive Director of The Solvent Extractors Association of India.

"We are cautious about the crop outlook. Another bout of rains is necessary to help the crop and also boost business confidence," said Mr Rajesh Agrawal, Chairman, Soyabean Processors Association of India.

"There is no doubt that the area under oilseeds is higher this time. But we are not sure of the production figures since we are not in a position to say anything about the yield," Mr Mehta said.

During the current kharif season, a record 169.60 lakh hectares (lh) have been brought under oilseeds crop. Of this, groundnut accounts for 56.75 lh, soyabean 79.12 lh, sunflower 8.14 lh (both records) and sesamum 16.69 lh.

"Since the rains were delayed this time, sowing of the crop was late. Therefore, arrival of the crop will take place only towards the end of October," Mr Mehta said.

The India Meteorological Department has said the south-west monsoon would extend up to the end of this month, giving some hope to the growers. It has also predicted revival of rainfall over west central regions this week.

Both Mr Agrawal and Mr Mehta said there were reports of pest attacks on the crop. "But these do happen regularly and are not cause for concern," Mr Agrawal said.

However, initial arrivals of the crops, especially soyabean and groundnut-in-shell, are reported to be of not satisfactory quality. There are also fears that the crop may be lower than last kharif, when it was a record 170.09 lakh tonnes.

"This year, we are also facing problems of higher expectations from the farmers. Last year, they got good prices and they expect an encore this year," an industry source said.

Last year, soyabean growers got on an average of over Rs 14,000 a tonne for their produce, thanks to poor crop in the US. Currently, due to lack of stocks and poor quality, soyabean is quoted at Rs 18,000 a tonne in Indore.

"Things are not the same now as last year. One, sowing in the US has been good. Two, the sowing intention in Brazil is also good. But it all depends on how the US crop production is," Mr Agrawal said.

As a result, the entire oilseed sector is cautious in making deals, especially for meals. "Everyone is watching the progress in the market. The prices are also not comfortable since seed prices are higher than last year this time and buyers in South-East Asia are not purchasing briskly," Mr Agrawal said.

So far, about 50,000 tonnes of soyameal have been contracted for forward delivery at around $215 a tonne f.o.b. This includes 20,000 tonnes sold to Pakistan. At the same time a year ago, around three lakh tonnes had been contracted for exports."A lower quantity of soyameal has been contracted for exports because everyone wants to wait for another two weeks before the scenario becomes clear," Mr Agrawal added.

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