The Hindu Business Line : Ample oilseeds supply seen in global market

GLOBAL production of 10 leading oilseeds, estimated at 365.35 million tonnes (mt) during 2004-05, is expected to result in ample oilseed supplies worldwide but there are concerns about the drought in Argentina and Brazil, according to Mr Thomas Mielke, Editor, Oil World.

"If rains do arrive by October, a big supply problem could emerge," Mr Mielke said.

In the global oilseeds production scenario, there are uncertainties surrounding Argentina and Brazil. "But there are also quite considerable uncertainties regarding oilseed yields and production in India, China and Canada,'' Mr Mielke said.

Global oilseed stocks during 2003-2004 were considerably lower because of a fall in production and strong demand. This lead to unusually high oilseed prices during January-June 2004. This in turn pushed up the area under oilseed cultivation higher by 5.7 million hectares.

"We estimate the world harvested area to be up by around 3 million hectares for soyabeans, by 2.5 million hectares for cottonseed, by 0.2 million hectares for groundnut, by 0.8 million hectares for rapeseed and canola and by 0.5 million hectares for palmkernals,'' Oil World said in its September 23, 2004 issue.

However, as demand is on an upward curve, crushings of oilseeds will rise, according to Mr Mielke. Crushings of 10 oilseeds will increase by 16.4 mt to 302 mt during the 2004-2005 season. "The boost in crushings will be necessary mainly to satisfy accelerating demand and also to replenish the tight stocks of soya oil and other oils and fats,'' he said.

World oil production during 2004-2005 is also seen higher at 33.07 mt as compared to 30.97 mt in the earlier season.

Similarly, global oil meal output is forecast to reach 233.5 mt in 2004-2005, up sharply by 12.6 mt from the earlier year.

India's production of oilseeds is expected to be lower at 111.20 lakh tonnes for the 2004-05 season compared with 125.20 lakh tonnes primarily because sowing was impacted due to delay in rains.

``The dry weather in July and insufficient rains in September has taken a toll on the yields of oilseeds crop,'' said Mr Govindbhai Patel, Past President, Solvent Extractors' Association. In India, the area under kharif production has increased by 17 lakh hectares, mainly soyabean.

The groundnut crop is estimated to decline significantly to 37 lakh tonnes against the previous season's 50.5 lakh tonnes. The decline, according to Mr Patel, is on account of moisture stress in July and insufficient rain in the beginning of September.

Soyabean production is estimated between 64-68 lakh tonnes. Rains during the last week have helped improve yields, industry representatives at Globoil India said.

While Madhya Pradesh's crop may witness a minor decline over the previous season, Maharashtra's output is seen up at 19 lakh tonnes from last year's 18 lakh tonnes.