Traders smirk over oilseeds estimates

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"If India grew 8.35 million tonne of mustard seed and 7.51 million tonne of soybean, how come edible oil imports are likely to gain on year"? said Sandeep Bajoria, president of The Central Organisation of Oil Industry and Trade.

Bajoria said edible oil imports in oil year 2004-05 (November-October) are likely to be around 5.0 million tonne, up from 4.4 million tonne a year ago.

India, the world's largest edible oil buyer, imports almost 50 per cent of its annual demand of 11 million tonne. It buys palm oils largely from Malaysia and Indonesia and crude soyoil from Brazil and Argentina.

Groundnut crop estimates are also being considered to be too far-fetched as so much seed was not seen in the market before, said a Rajkot-based trader.

Traders also peg the official wheat output estimates to be way off the mark.

"It seems that the government, in a bid to keep prices lower and make everyone feel that imports are not needed, is keeping wheat estimates lower," said a Delhi-based wheat trader.

"Further, it is just three months now that the new wheat crop has come to the market and prices have shot up by Rs 150 per 100 kilogram. Thus, it seems unlikely that the crop is as good as the government estimates are projecting," said Prem Gupta, senior vice-president of Roller Millers' Federation of India.

Wheat crop in Punjab, Haryana and Uttar Pradesh were affected due to infestation and untimely rains and market players say that even the slight rise--of 1.3 million tonne--in Madhya Pradesh crop is unlikely to meet the shorfall caused in other states.

The agriculture ministry on Friday had released the latest crop production estimates pegging foodgrain output at 204.61 million tonne, down 4.14 per cent on year's record output of 213.46 million tonne. The shortfall was due to lower output in the kharif season because of poor monsoons. However, the production of rabi crops was more than the previous season's.

Among the commercial crops, production of oilseeds and cotton increased substantially in 2004-05. However, production of pulses, jute and mesta and sugarcane dropped from previous year's levels.

Cotton output rose by 22.6 per cent, touching a record 17 million bales (of 170 kg each) in 2004-05.

Coarse cereals, grown primarily in the rainfed areas, fell 11 per cent to 33.92 million tonne. The production of pulses also fell 10 per cent to 13.38 million tonne. Sugarcane production in 2004-05 is estimated down 2 per cent at 232.3 million tonne.