Farmers begin releasing stocks, as expectations rise of a bigger harvest.
The inventory of vegetable oils rose 9.5 per cent last month due to high imports and more domestic production. The inventory on August 1 was estimated at 1.215 million tonnes, 105,000 tonnes more than the 1.11 million tonnes a month ago. The current stock at various ports is estimated at 635,000 tonnes (crude palm oil at 275,000 tonnes; refined, bleached and diodised palmolein at 65,000 tonnes; degummed soybean oil at 235,000 tonnes and crude sunflower seed oil at 60,000 tonnes). About 580,000 tonnes is in the pipeline.
Data by the Solvent Extractors Association (SEA) show July imports at 800,644 tonnes, a 6.3 per cent rise from 732,232 tonnes in the previous month and a sharp increase of 34 per cent from the 596,024 tonnes imported in the corresponding month last year. SEA Executive Director B V Mehta attributed low pipeline inventory in the previous months as a major reason for high imports. In the July quarter, vegetable oil imports rose 11.5 per cent to 2.09 million tonnes as compared to 1.88 mt in the previous quarter. In the same quarter of the previous year, imports were 2.13 mt. Similarly, soybean crushing by domestic mills has risen substantially to 45-50 per cent of capacity from 35-40 per cent a month before, as farmers have started releasing stocks from the previous season.
While releases intensified since May after a favourable monsoon raised hope for a bumper kharif crop, farmers and stockists were still holding 1.2-1.5 mt soybean, said Rajesh Agarwal, coordinator of the Indore-based Soybean Processors Association. According to an estimate, farmers have released over two mt in the three months ended July. Agarwal hoped another million tonnes soybean would be released before the start of the 2010 kharif harvesting. The apex trade body, the Central Organisation for Oil Industry & Trade, put total output last season at 8.5 mt, compared to 9.5 mt in the previous year, due to favourable climate. This year, soybean output is estimated at 9.5 mt, despite a 3.75 per cent decline in acreage at 9.31 million hectares. India’s soybean meal exports were 160,000 tonnes in July. Estimating about 200,000 tonnes domestic consumption, total meal availability was estimated at 360,000 tonnes last month.
This means soybean crushing could be 500,000-550,000 tonnes, said Agarwal. Confirming higher capacity utilisation, an official of the country’s largest oilseed crusher, Ruchi Soya Industries, said, “Availability of beans has certainly increased, as farmers and stockists found it not worth holding any more.” Soybean prices for near-month delivery on the NCDEX have surged 13 per cent since July 1 and traded at ' 2,145 on Saturday.