Total oilseeds output during the current season is likely to be 17.9 million tonnes (MT), higher by nearly 5 per cent compared to last year. This increase is due to the extended rainfall that negated the impact of missing rain in the early part of the season in Maharashtra and Andhra Pradesh, the two major oilseeds producing states.
After two initial months of scattered rainfall, the monsoon resumed evenly throughout the country at the time of flowering, resulting in 10-12 per cent additional buds in plants.
These facts were revealed in the survey conducted by the Business Standard.
As against 16.89-17.1 MT produced during the same season last year, trade, industry and farmers’ bodies estimate the output this year to be around 17.9 MT. The Central Organisation for Oil Industry & Trade (COOIT) and the Solvent Extractors’ Association (SEA) also estimate the crop in the range of 17.8-17.9 MT.
Individual seed crushing companies have even extrapolated from this projection to put the output at over 18.10 MT as there has been an exponential growth in yield across all seeds.
| REAPING RICH HARVEST Kharif crop estimate for FY 09, in MT | ||
| Oilseeds | 2007-08 | 2008-09 |
| Groundnut | 5.0 - 5.2 | 4.9 - 5.0 |
| Soybean | 9.4 - 9.5 | 10.5 - 10.6 |
| Castorseed | 0.8 - 0.9 | 1.05 - 1.1 |
| Others | 1.3 - 1.7 | 1.3 - 1.5 |
| Total | 16.5 - 17.2 | 17.75 - 18.2 |
Higher global prices of edible oils persuaded farmers to dedicate maximum area to oilseeds. This resulted in a 4 per cent increase in oilseeds acreage to 183 lakh hectares (ha), higher than COOIT’s last estimate of 180.86 lakh ha towards the end of September.
An ever-growing demand for bio-diesel globally helped boost edible oil prices even in domestic markets.
More From This Section
The kharif season contributes about 82 per cent of the country’s crushable edible oilseeds such as groundnut, soybean, sesame seed, niger seed, sunflower seed and castor.
Despite 8 per cent fall in the first quarter consumption because of high prices, India’s edible oil demand is likely to maintain its growth rate at 4 per cent, feels Davish Jain, chairman of COOIT.
Indian demand for edible oils is expected to increase from the current level of 12.5 MT to 15.6 MT in 2010 and to 21.3 MT by 2015. Between April and June this year, edible oil demand slumped to 46.16 lakh tonnes as compared to 50.13 lakh tonnes in the comparable period last year.
Since prices have almost halved now, the demand may rise in the forthcoming festival season, says Sanjay Shah, Chairman, Indian Oilseeds and Produce Exporters Association (IOPEA).
Meanwhile, farmers are enthused by the government’s decision to raise the minimum support price (MSP) of edible oilseeds by up to 3 per cent. Although prices of oilseeds are moving in a close range of the MSP, seed growers are confident that the government would procure the entire output in case spot prices fall below the state-determined price.
The MSP of groundnut in shell has been raised by 35.5 per cent to Rs 2,100 per quintal for the kharif season 2008-09. The same for sunflower seed has been hiked by 46.7 per cent to Rs 2,215 per quintal and soybean by 48 per cent to Rs 1,350 per quintal.
Thomas Milke, editor of the Germany-based Oil World, a leading monthly publication in the edible oil sector, foresees an increase in India’s reliance on imports because the country has limited scope of growth in acreage area, which means little increase in output. He suggests that the government and local bodies encourage arable farming for oilseeds.
“Genetically modified (GM) seeds are the only option left to raise output in India. Engineered seeds have already proved successful across the globe. Therefore, India should also start using GM seeds for higher yield and reduce reliance on imports,” says Dorab Mistry, Director of Godrej International.