By TK Abraham,Bloomberg
Mumbai: India, the world’s second-biggest vegetable oil buyer, may produce 5.4 % less oilseeds in the year to October from a year earlier as farmers planted more profitable crops such as wheat and lentils, a trade body said.
India’s production of oilseeds such as soybean, mustard, peanuts and sunflower would be 22.67 million metric tons compared with 23.97 million tons a year earlier, Inder Pal, assistant secretary at the Central Organization for Oil Industry and Trade, said today. The trade body’s latest oilseed output estimate is higher by 3 % from a January estimate of 21.98 million tons.
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. Soybean 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 soybean and mustard crops estimates have been revised higher.”
Production of winter-sown oilseed crops was forecast at 9.52 million tons, down 7.3 % from a year earlier.
India’s production of oilseeds may decline by 16 % to 23.62 million tons in the 12 months ending 30 June from a year earlier, the farm ministry said on 6 February.
Edible oil imports to India rose 3 % to 1.08 million tons in the four months ended February from 1.05 million tons 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 soybeans. India mostly imports palm oil and soybean oil.