The output of kharif oilseeds is expected to recover this year despite a shrinkage in acreage and severe weather conditions. The increase would largely be due to an anticipated bumper groundnut harvest in Gujarat.
Analysts feel that vegetable oil imports may decline this year because of improved domestic availability. The prices are expected to remain steady at low levels. However, any change in the import duty structure -- which is not being ruled out -- may change the import and price scenario.
According to estimates compiled by the agriculture ministry on the basis of information received from the states, the total output of kharif oilseeds in 2001-02 is projected at 12.5 million tonne, against 11.6 million tonne in 2000-01 season.
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The industry is projecting an even brighter picture. For instance, the VMA Oilseeds Research and Development Institute (Vordi), supported by the vanaspati industry, anticipates the total harvest to be between 12.6 and 13 million tonne, about 1.5 to 2 million tonne higher than that in the last season.
The Central Organisation for Oils Industry and Trade (Cooit) also expects the output to be higher than in the last kharif, pointing out that the good crop in Gujarat will compensate for the deficient production in states such as Maharashtra, Andhra Pradesh and Karnataka due to erratic rainfall.
Regarding the area coverage, there is not much discrepancy in the official and trade estimates. While the official numbers show a decline of about 0.9 million hectare -- from about 15.1 million hectare in the last kharif to 14.2 million hectare in the current one, Vordi estimates put this figure at 14.1 million hectare.
Industry circles say vegetable oil imports in October are likely to fall to around 400,000 tonne from last year's corresponding figure of 520,000 tonne. Imports in September were also down to below 400,000 tonne as against 490,000 tonne in the same month in 2000.
Market sources said the downtrend in imports would continue till the domestic oilseeds crushing season ends in April. Though new crops would augment supplies by a million tonne, they would reduce imports by just 350,000 tonne. The balance would be taken care of by normal growth in per capita consumption, rise in population and rebuilding of stocks.
Talking about groundnut, the most important kharif oilseed, Vordi deputy director G Chandra said: "There can be a million tonne increase in the groundnut production to 4.9 million tonne due to good rains in Gujarat. However, output in other producing belts, including Andhra Pradesh, Karnataka and Tamil Nadu, will be lower due to poor rainfall."
According to agricultural experts, groundnut crop is likely to be around 1.9-2 million tonne. If it rains further, it can go up to 2.1-2.2 million tonne. Last year, it was between 1-1.1 million tonne. This time, groundnut seeds will be bold with a relatively higher oil content.
On the other hand, Becharbhai Bhadani, minister of state for agriculture in Gujarat, said: "The actual picture of crops for the new season will be clear later as the recent late rains in Saurashtra region have changed the situation. This has led to the emergence of certain diseases which might change the crop scenario. The crop estimates put out by some organisations are beyond my understanding."
Cooit executive director KML Chabbra said: "A good groundnut crop provides an added advantage because of high oil recovery of around 33-40 per cent, against some 18 per cent in case of soyabean." The arrival of the new groundnut crop have already commenced. About 85,000 to 90,000 bags of 35 kg each are estimated to have already been marketed. The arrivals would peak in about a fortnight, traders said.
As per oil industry sources, out of the 700 oil mills in Saurashtra region, 100 mills are in operation. But, all of them will be in operation during the Navratri season. Market sources reveal that the price range of Rs 300-325 per 10 kg of groundnut oil is likely to be maintained throughout the season.
However, the outlook for other kharif oilseeds is not that bright. Lack of rainfall in the later part of the season in Madhya Pradesh has led to a decline in the soyabean production estimates by nearly 8 lakh tonne to 5.1 million tonne, similar to last year's level. The new crop has started arriving in the mandis across western and central regions of the country.
The present level of arrivals of around 10,000 tonne a day is likely to rise to 40,000 tonne by the third week of October, traders said.
The production of sesamum is anticipated to increase marginally to 5.63 lakh tonne from 5.49 lakh tonne last year while that of toria might stagnate at about 1.25 lakh tonne. Sowing operations for sunflower in Karnataka and Maharashtra are still under way due to revival of the monsoon, bringing late rains. However, due to a shift by sunflower growers of Punjab to other crops, the overall production is likely to be lower by one lakh tonne to 1.78 lakh tonne.
The output of nigerseed in 2001-02 kharif season could fall to 0.95 lakh tonne compared to one lakh tonne last year, while castor production is estimated at 5.66 lakh tonne as against 10.48 lakh tonne in 2000-01.
However, analysts add that there will not be big price movements in the local market. "Big international price movements will be evened out by adjustment of import duties. If a mini-bull market takes place in the first quarter of 2002, India will have to cut import duties. That could fuel the bull market further and lead to a circle of lower duties and higher prices," they added.
The vegetable oil consumption pattern in the country is greatly influenced by the import duty structure. Due to the preferential treatment under the Bound Rate of 45 per cent for soyabean, consumption of this oil is on the rise. On the other hand, consumption of RBD palmolein has already crossed the peak and is now slated to decline. The growth in per capita consumption of edible oils has also slowed down in last two years.