Lower rabi oilseed area may erase kharif gains

Lower oilseed acreage in the rabi season is likely to take away gains accruing from higher kharif acreage this year, compelling the country to import more vegetable oil in months to follow, analysts said.

According to data released by the government, oilseed acreage till November 30 stood at 6.9 million hectare, down 14.3 per cent from the same period a year ago. Rabi oilseed acreage is also down 23 per cent from the average rabi oilseed acreage of 9.1 million hectare.

"We might lose advantage of higher kharif acreage due to lower rabi acreage," said BV Mehta, executive director, Solvent Extractors Association of India.

Rabi acreage was lower in Rajasthan and Haryana, the main producing belt for mustard, due to high temperatures in October and November, analysts said. Until last month, mustard acreage stood 5.3 million hectare, down 13.9 per cent from a year ago.

High temperatures leading to poor soil moisture also kept groundnut sowing at 241,000 hectare and sunflower sowing at 740,00 hectare, down 13.6 per cent and 18.5 per cent, respectively, from last year.

"The acreage might show an improvement, if it rains next week," said an India Meteorological Department official.

There has been no post-monsoon rainfall this year, he said. Major farm states such as Punjab, Haryana, Madhya Pradesh, and Rajasthan did not receive any rain after the monsoon season ended in September.

Rainfall deficiency this year varies from 80 per cent in east Uttar Pradesh to 100 per cent in Rajasthan.

Also, 17 out of 36 meteorological divisions in central and western India, received scanty rains in October-November, causing poor soil moisture levels in oilseed growing areas.

The dip in acreage may also lead to lower edible oil availability because oil content in mustard is higher than soybean, Mehta said.

The country grows two oilseeds crops "" summer and winter season crops. Mustard seed, the main winter oilseed crop, has an oil recovery level of 45 per cent against 18 per cent from soybean, the main crop in summer.

The drop in rabi acreage will also lead to higher vegetable oil imports this year, Mehta said, projecting 300,000-400,000 tonnes more vegetable oil imports in 2007-08.

Moreover, the mustard stock with National Agricultural Cooperative Marketing Federation has fallen to 300,000 tonnes from 2 million tonnes last year.

So, the agency will not be able to bail out any sudden spurt in demand, said an analyst at a Mumbai-based brokerage.

"Let's wait till December end to see what is the final acreage," Mehta said. "It will be tight rope walking this year," said another analyst.