The Hindu Business Line : Tardy oilseeds planting causes concern

After wheat, sugar and pulses, it could be edible oils next. The erratic behaviour of southwest monsoon has begun to cause concern on the oilseeds production front.

Large parts of central and northern India are yet to take to sowing of kharif oilseeds. Planting has been delayed due to lack of precipitation. If it does not rain in the next 7 days or so, growers may be forced to go in for short duration alternative crops such as pulses.

Soyabean and groundnut are two important kharif oilseeds. Reports from different parts of the country suggest that areas where pre-monsoon or early sowing took place are in desperate need of water. Other areas are waiting for the first spell of rains.

Domestic scenario

Come August and a series of festivals till October, demand for cooking oils will rise manifold. Tightening domestic supplies and low levels of pipeline stocks are seen adding to the domestic market's concerns. The one saving grace is the large stock of rapeseed/mustard (estimated at over 20 lakh tonnes) with National Agricultural Cooperative Marketing Federation of India.

The international market is keenly watching developments in India, one of the world's largest vegetable oil importers. Despite large production and stocks, global prices are firm, thanks to demand from the biodiesel sector.

For instance, in Malaysia, the crude palm oil market has been stubbornly holding at about 1,450 Malaysian ringgit a tonne despite inventory of nearly 1.6 million tonnes.

The next few days are crucial for oilseeds when a definite direction for the domestic market will be set. It should come as no surprise if the Government decides to reduce customs duty on palm oil from the current level of 80 per cent to encourage higher inflow of oil to met demand and contain prices.

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