MUMBAI: India's vegetable oil imports are likely to increase further this year (November 2009-October 2010) due to lower production of mustard seed in Rajasthan, where 4.5 lakh hectares has been diverted to wheat and other crops.
Edible oil imports are likely to increase by 9,00,000 tonne to 9.5 million tonne, said BV Mehta, executive director of industry body Solvent Extractors’ Association (SEA) of India. The country’s production of edible oils such as sunflower, soya, groundnut, etc, ranges between 7-7.5 million tonne against an annual consumption of 13-14 million tonne.
“Lower mustard seed production in addition to lower prices of oilseeds compared with other crops, zero duty on imports, low global prices of edible oils and a rising rupee is expected to lead the country to import 9 million tonne in 2009-10 (November-October), up from 8.6 million tonne last year. This is because of the divergence of 4.5 lakh hectares of mustard area in Rajasthan to wheat. Despite the area under acreage of the oilseed having gone up in UP, it will be a mixed crop (with potato) and so yields will go down,” Mr Mehta said.
Mr Mehta said the impact of lower oilseed production would be felt by the domestic industry which would not get raw material in sufficient quantity to crush and this in turn could affect the domestic cattlefeed industry, which would suffer from want of oilmeal that is used as feed.
SEA estimates the mustard crop area in Rajasthan to be down at 23.25 lakh hectares in 2009-10 from 28.03 lakh hectares last year, while the yield will be lower at 1,161 kg/hectare against 1,030 kg/hectare last year. Total crop in Rajasthan is forecast at 27 lakh tonne from 30 lakh tonne last year. “The overall area has reduced by 2.11 lakh hectares (3%), while the production is down by 2.80 lakh tonne (4.5%),” said SEA in a press release.
While minimum support price of mustard seed was increased marginally by Rs 30 to Rs 1,830 per quintal (100 kg) in 2008-09, wheat MSP was raised by Rs 80 to Rs 1,080. For 2010-11, the government has announced an MSP of Rs 1,100 for wheat.
Source : The Economic Times