Soyabean oil recovers from Brexit punch.

KOLKATA: Soyabean oil recovered from the Brexit fallout on Monday, albeit marginally.

The commodity was up 1.49% at $748 per tonne in the international market. Crude palm oil, on the other hand, remained range bound and was at $645 per tonne as against $642 on Friday. Indian edible oil companies like Adani Wilmar felt that this recovery in international prices will not have much impact despite the rupee weakening against the dollar.

"This level of price swing is normal and will not affect our imported bill much," Angshu Mallick, chief operating officer at Adani Wilmar, told ET. Adani Wilmar sells edible oil under the Fortune brand. Mallick said soya oil market should remain steady on the price front as sowing has picked up for oilseeds.

"Soyabean sowing has picked up in Madhya Pradesh and Maharashtra. Soyabean price has remained steady over the last fortnight and is hovering around.`3,750-3,800 per quintal," Mallick said. An analysts said crude palm oil is also not expected to go up in near future as the export demand from Malaysia is less. But there is a little apprehension that soyabean and other kharif oilseed production may be less this year as two successive droughts may force farmers to shift to pulses.

"Last year, farmers faced a dry spell during the sowing season, which was followed by heavy rains during the harvesting period between September and October," said BV Mehta, executive director at Solvent Extractors' Association of India. "The erratic weather conditions had impacted the kharif crop in 2015.

Farmers are still worried about the late rains. That's why some may shift from soyabean to some other kharif crop this year." During the 2015 kharif season, production of soyabean was around 69.29 lakh tonne, compared with 87.1 lakh tonne in 2014. "This year, farmers are aiming to increase the yield by at least 20% for a better crop size. Generally, per hectare production is 980-1,000 tonne. We are aiming to increase it to 1,200 tonne per hectare," said Mahesh Rajput, a farmer from Indore.

An increase in crop size will help the country reduce its import bill on account of edible oil. The country generally imports 14.5-15 million tonne of edible oil every year to meet its domestic consumption, which is around 20 million tonne per annum.

Source : economictimes.indiatimes.com