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Good crop stabilizes oil prices

Good crop stabilizes oil prices
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First Published: Mon, Jul 02 2007. 05 12 PM IST
Updated: Mon, Jul 02 2007. 05 12 PM IST
New Delhi: Prices of edible oil in India are likely to remain around current levels with a good crop expected this year, a senior industry official said on Monday (2 July).
“We expect the price situation to be comfortable and stable and a good crop ahead,” the official told Reuters after meeting India’s food secretary.
“We are expecting better soyabean and better groundnut production,” he said. Well-distributed monsoon rains and good prices were likely to spur output.
Prices of edible oils have risen by between 20% and 40% over the past year, mainly due to a domestic shortfall and high international prices as oils are used to produce biofuels.
India has estimated oilseeds output at 23.26 million tonnes in the year to October, down from 27.98 million, last year.
But traders say increased sowing could boost output to 27 million tonnes in the new season that starts in November.
Last week, the agriculture ministry said 1.3 million hectares had so far been planted with summer-sown oilseed crops, adding that as monsoon rains advanced into key growing regions the pace of sowing was picking up.
Farmers are planting groundnut in Gujarat, and soybean in the states of Madhya Pradesh, Maharashtra and Rajasthan.
Edible oil industry officials urged the central government to cut taxes imposed by state administrations in a bid to encourage more farmers to grow oilseeds crops.
“If we can reduce the levies, the benefit will go back to growers and they will be encouraged to grow more oilseed crops,” the official added.
Trade officials say boosting domestic oilseeds output is vital if costly imports are to be reduced.
India is one of the world’s largest importers of edible oils. It buys palmoils from Malaysia and Indonesia and soyoils from Argentina and Brazil.
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First Published: Mon, Jul 02 2007. 05 12 PM IST