Delayed rains may bring down edible oil output by 12.8% : CMIE

Delayed monsoon is likely to take its toll on edible oil production, with the leading think tank Centre for Monitoring of Indian Economy (CMIE), forecasting a 12.8 per cent fall in its output during 2004-05 oil year.

"We expect edible oil production to decline by a sharp 12.8 per cent to 5.39 million tonne in 2004-05 (Nov-Oct) and this is mainly on account of the poor prospects of groundnut crop," the CMIE said in its latest July review issue.

The delayed monsoon has forced farmers, to shift from groundnut to other crops, it said, adding, official figures indicated that the area sown under groundnut as on June 20th stood at 1.9 lakh hectares as against 4.8 lakh hectares during the same period last year.

"Groundnut is a major kharif oilseeds crop and its production is highly correlated to the amount and distribution of rainfall," the report said. Production of other variants of edible oils barring safflower, niger and coconut is also expected to fall during Nov-Oct, 2005-06.

Soybean oil production is likely to fall by 7.8 per cent the report said, adding, as on June 20th this year, area sown under soybean was a minuscule 17,000 hectares as against 1.37 lakh hectares during the comparable period last year.

The area under sunflower, so far, is also quite low compared to a-year ago levels, it said, adding while on one hand the acreage has shrunk, on the other, the late rains are likely to dampen the yields.

The CMIE report said, soybean production could decline by 7.8 per cent while sunflower could come down by 15.5 per cent during the 2004-05 oil year.

It said, the output of mustard seed, which is a major Rabi oilseeds crop, is expected to be around 63 lakh tonne as against the bumper crop of 76.4 lakh tonne in 2004-05.

"Because of the bumper Rabi 2005 mustard seed crop, the market prices of the commodity fell below its minimum support price of Rs 1,700 a tonne this year," the CMIE said, adding that the sharp decline in prices is expected to lead a fall in output next year.

The total oilseeds output during 2005-06 is likely to fall by 6.5 per cent, the report said, adding, "using the standard conversion rate, this would translate into a 12.9 per cent decline in edible oil production next year".