Oilseeds output may go up 25%

KHARIF CROP SURVEY: OILSEEDS

Acreage has jumped by 6 per cent to 17.5-18 million hectares

Favourable climate conditions, coupled with the expectation that farmers will get a better price, has raised the crop estimates of oilseeds by around 25 per cent for the kharif season.

As against 13.5-14 million tonnes produced during the same season last year, market participants including organisations like the Central Organisation for Oil Industry & Trade (COOIT) and Solvent Extractors' Association (SEA) expect the output this year to be between 16.5 million tonnes and 17 million tonnes. Some traders however feel that the output may even touch 18.5 million tonnes.

The yield is higher in some areas due to modernised farming techniques. Acreage during the period has jumped by 6 per cent to 17.5-18 million hectares (ha) this season from 16.5-17 million ha in the kharif season last year.

However, the main oilseed crop of the next rabi season, mustard seed, is likely to face the heat due to lower realisations and farmers shifting to wheat. Mustard seed sowing began in the second fortnight of October and harvesting commences by early February. 
 

Kharif crop estimate for 2007-08, in mn tonnes
Oilseeds	2006-07	2007-08
Groundnut	3.5-3.6	5.0-5.4
Soyabean	8-8.0	9.2 7
Castorseed	0.7-0.8	0.8-0.9
Others	1.5-1.6	1.5
Total	13.5-14.0	16.5-17.0

Ramesh Garg, chairman, K S Oils, says sprouts may get damaged if there is no rain. He estimates a total mustard seed output of 5 million tonnes this rabi season as against 6.7 million tonnes last season. In the worst case scenario, it could slump to 4.5 million tones, he says.

The brighter side, according to SEA, is that the prices of mustard seed perked up by 35 per cent to Rs 1,800 per quintal over the last six years as against 61 per cent increase witnessed in the wheat MSP announced by the government.

This year also farmers are getting higher yields and returns, prompting them to go in for more oilseeds planting, according to Dinesh Shahra, managing director, Ruchi Soya Industries. The view is corroborated by Sanjay Shah, Chairman, Indian Oilseeds and Produce Exporters Association (IOPEA).

However, traders in Mumbai believe that the prices have already peaked and there is hardly any room for them to go further up. Some farmers have chosen wheat as the optional crop since realisations are better.

Moreover, the increase in the minimum support price (MSP) of wheat "� up to Rs 1,000 per tonne with additional bonus expectations -- is likely to lure farmers from mustard to wheat and barley.

Hence, the acreage during the forthcoming rabi season is likely to decline by up to 25 per cent as farmers may shift to wheat and other foodgrains.

Traders also believe that groundnut oil prices, which slipped due to slackening consumer demand and better arrivals from other states, will rise again. Incidentally, Andhra Pradesh is fast catching up with Gujarat in the cultivation of groundnut oil crop.

The consensus, meanwhile, is that India should become self-reliant in edible oil production. Towards this end, the introduction of genetically-modified seeds may be advisable after a thorough study of their impact on the health and environment.

The growth rate is 4-6 per cent per annum, but consumers are very sensitive to prices. If edible oil prices go up substantially, per capita consumption will remain stagnant.