Kharif oilseeds output may decline by up to two million tonnes over last year as the area under the crops has declined due to poor monsoon coverage, according to the solvent extraction industry. This could fuel a record import of edible oils next season starting November, with industry pegging shipments at some 12 million tonnes.

This could spare consumers as prices are unlikely to rise during the festival season ahead as prices in the global market are ruling lower. However, growers may face the impact as higher and cheaper imports will exert pressure on prices of oilseeds such as groundnut and soyabean. Harvest of these crops are set to begin from next month.

“We expect the oilseeds output to decline by about 1.5 to 2 million tonnes over last year, presuming that rabi production would be normal,” said BV Mehta, Executive Director, Solvent Extractors Association of India. Last kharif , the edible oilseed production stood at over 20 million tonnes.

Till the first week of September, oilseeds were planted on about 173.43 lakh ha, nine per cent lower than last year’s 188.93 lakh ha.

Crop statistician, GG Patel of GGN Research said the oilseed crop will be lower than last year on drop in acreage, but it would be too early to quantify the crop size at this stage. A clearer picture on the crop size may emerge by October-end, Patel said.

Edible oil imports are rising by about 7-8 lakh tonnes a year on rising domestic demand. The per capita consumption is increasing by 3-4 per cent every year, Mehta said. The total edible oil consumption is currently estimated at around 18 mt.

India’s edible oil imports, which stood at 8.37 mt in 2010-11 rose to 10.38 mt in 2012-13 and are poised to touch 11 mt in the current season ending October.

“Imports are cheaper now as global prices have declined by 10-15 per cent over last year on surplus availability of palm oil, soyabean and sunflower,” Mehta said.

Further, the prices, especially of palm oil are expected to remain depressed, influenced by the recent decline in crude oil prices. The drop in crude oil prices will curb the diversion of palm oil to biodiesel, Mehta said.

Dumping Ground

Mehta said rising imports of edible oil has made India a dumping ground for countries such as Malaysia and Indonesia, key producers of palm oil that are seen boosting exports through duty cuts. “There is a need to protect the domestic farmers from rising imports or else they will move away from oilseed cultivation. In this context, we will be urging the Government soon to hike the import duty on refined oils from the current 10 per cent to 25 per cent. We also want the Government to raise import duty on crude palm oil from the current 2.5 per cent to 10 per cent,” Mehta said.

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