CMIE revises upward edible oil output 18.5%

The Centre for Monitoring Indian Economy (CMIE) has revised upwards its earlier projection for edible oil output by 18.48 per cent for next oil year due to smart pick-up of kharif oilseeds sowing acreage in July.

"With a good progress in the monsoon in July, the kharif sowing has picked-up quite well," said CMIE in its August review issue.

Considering the sharp rise in area under most oilseeds, CMIE has revised its forecast for edible oil production during November-October 2005-06 upwards to 63.85 lakh tonne from 53.89 lakh tonne.

The upward output revision has also led to scaling down of import projection to 48.9 lakh tonne for the next oil year. It put edible oil import for 2004-05 at 42.7 lakh tonne.

CMIE expected edible oil consumption to grow by five per cent during November-October 2005-06. Although edible oil prices of select few variants saw some improvement in domestic as well as international markets, these continued to rule below their year-ago level.

"The weak trend in prices will continue for another two months," the economic think tank said.

On the performance of edible oil companies, it said, "most edible oil companies reported higher profits in the June quarter".

With prospects of the groundnut crop in kharif season looking bright, the domestic prices of groundnut oil has started improving.

From Rs 455 per 10 kg at the end of July, the prices of groundnut oil rose to Rs 495 per 10 kg on August 4.

However, as against the year-ago level, they continued to mark decline, albeit marginal.

Prices of other variants of edible oil such as soybean oil and sunflower oil showed some improvement in July, but again slipped in the first week of August.

In Mumbai, soybean oil was quoted at Rs 359 per 10 kg on August 4, which was 21.6 per cent lower than the year-ago level.

A similar trend was observed in the prices of sunflower oil, which suffered year-on-year decline of 7.5 per cent and 5.5 per cent in July and the first week of August, respectively.

CMIE predicted continuance of the declining price trend for soyoil and vanaspati oil at least for the next two to three months.