Mumbai: India, the world’s second-biggest buyer of vegetable oils, may produce 5.4% less oilseeds in the year to October from a year earlier as farmers switched to more profitable crops such as wheat and lentils, a trade body representative said.
India’s production of oilseeds such as soyabean, mustard, peanuts and sunflower would be 22.67 million tonnes (mt) compared with 23.97mt a year earlier, Inder Pal, assistant secretary at the Central Organization for Oil Industry and Trade, said on Monday.
The trade body’s latest oilseed output estimate is higher by 3% from a January estimate of 21.98mt.
The drop in India’s oilseed output comes as Malaysian palm oil futures on the Malaysia Derivatives Exchange in Kuala Lumpur have gained 26% in the past six months. Soyabean oil prices are up 24% during the same period in Chicago.
“Production is down mainly as farmers have switched to more profitable crops such as wheat,” Pal said in a phone interview from New Delhi. “The overall figure is up because soyabean and mustard crops estimates have been revised higher.”
Production of winter-sown oilseed crops was forecast at 9.52mt, down 7.3% from a year earlier. India’s production of oilseeds may decline 16% to 23.62mt in the 12 months ending 30 June from a year earlier, the agriculture ministry said on 6 February.
Edible oil imports to India rose 3% to 1.08mtin the four months ended February from 1.05mt a year earlier, according to the Solvent Extractors’ Association, which represents about 800 oilseed processors.
Malaysia and Indonesia produce 85% of the world’s palm oil. The US, Brazil and Argentina grow 80% of the world’s soyabeans. India mostly imports palm oil and soyabean oil.