Industry measuring competition from cotton, pulses

M.R. Subramani

Chennai, July 4 With monsoon spreading across almost all parts of the country, sowing in oilseeds is expected to gather pace and be in full swing before the end of next week.

“Sowing will pick up now as rains have been excellent in almost all parts of the country,” said Mr B.V. Mehta, Executive Director of Solvent Extractors Association of India. “Though there have been excess rainfall in some parts such as Gujarat, crops such as groundnut are likely to benefit,” he said.

One of the reasons for the optimism with regard to oilseeds is that growers chose to wait for rains this year. “Had farmers planted the crop, the excess rainfall could have damaged it since the 20-odd-day-old plants would not have been able to withstand it,” Mr Mehta said.

“The rains will help oilseed crop in Saurashtra, Maharashtra, Madhya Pradesh and even the Rayalaseema region in Andhra Pradesh,” he said.

According to Mr Rajesh Agrawal, spokesman of the Soyabean Association of India, sowing in soyabean is progressing well, though exact data will be available only next week.

“Sowing in soyabean is expected to be completed next week and we will get to know the progress,” he said. “The entire soyabean-growing belts have received good rainfall, though we cannot rule out minor problems here and there,” he said.

Mr Agrawal said soyabean production this year could be on par with last year and there were hardly any chances of a lower crop. “However, we will have to see if the acreage goes up in view of higher edible oil prices. This is because prices for other crops too is good,” he said.

Mr Mehta, too, agreed with the view that the edible oil industry will have to wait and watch to ascertain if they would be any rise in coverage of oilseeds. “There is competition from crops such as cotton and pulses. Prices for these are very good, though the groundnut oil price of Rs 75,000 a tonne is very impressive,” he said.

According to analysts, lower input costs and better yield will determine the crops growers will opt for and as such, cotton stands to gain. “We will have to see how much inroads cotton has made into oilseeds, especially in Gujarat,” Mr Mehta said.

According to the Ministry of Agriculture, oilseeds coverage till June 20 was down 3.3 lakh hectares (lh) at 4.52 lh compared with the corresponding period last year. Groundnut sowing was lagging behind by 1.4 lh at 2.53 lh, while soyabean was behind by 80,000 hectares at 24,000 hectares. Oilseed crops such as sesamum and sunflower too trailed during the review period.

Lower oilseeds production last year and slower coverage have lifted edible oil prices since the beginning of the year. Besides, the global vegetable oil market is also witnessing a firm trend in view of lower stocks, higher crude oil prices and diversion of palm and rapeseed oil for bio-diesel.

On Wednesday, groundnut oil was quoted at Rs 775 for 10 kg, up from Rs 567 at the year’s beginning, while sunflower oil was quoted at Rs 565 against Rs 510. On the other hand, landed prices of crude palm oil is Rs 41,500 a tonne c&f against Rs 37,208 a year ago, while that of de-gummed crude soyabean oil is Rs 44,000, against Rs 37,548.

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