(Businessweek) – India will probably harvest the biggest winter oilseeds crop in three years after farmers boosted planting, slowing an expansion in imports of palm oil by the world’s largest consumer.
Production may climb as much as 7.1 percent to 10.5 million metric tons in the harvesting season that begins March 1, said B.V. Mehta, executive director of the Solvent Extractorsâ Association of India, which represents about 875 processors, refiners and traders. That would be the most in three years, according to data from the Agriculture Ministry.
India is heading for bigger harvests of everything from wheat to rice and cereals after the best monsoon rains since 2007 spurred farmers to increase planting. A larger oilseed output may help the country curb record imports of palm and soybean oils and boost exports of oilseed meals to buyers in Japan, Thailand, Malaysia and South Korea.
“The soil moisture and weather have been good so far after a better-than-normal monsoon,” Mehta said in a phone interview from Mumbai on Jan. 27. Production will increase if the weather remains favorable through the harvest, he said.
Planting of winter-sown oilseeds including rapeseed rose 3.3 percent to 8.84 million hectares (21.84 million acres) as of Jan. 24, the Agriculture Ministry estimates. Production of oilseeds grown during the monsoon may climb 14 percent to a record 23.9 million tons in 2013-2014, the ministry estimates. Monsoon crops including soybeans and peanuts are planted from June and harvested from October.
Low Stockpiles
India is the world’s biggest cooking oil consumer after China and imports more than half of its demand. It buys palm oil from Indonesia and Malaysia and soybean oil from the U.S., Brazil and Argentina.
Imports rose 4 percent to an all-time high of 10.39 million tons in the 12 months ended Oct. 31, according to association data. Shipments surged 27 percent to 1.97 million tons in the two months through December, the association said Jan. 13. Stockpiles fell to 1.4 million tons at the end of October from 1.57 million tons a year earlier, it said Nov. 15.
“Import of edible oils will not fall this year as the stockpiles at the end of last season was low,” said Faiyaz Hudani, an associate vice president at Kotak Commodity Services Ltd., a Mumbai-based broker. “The purchases may increase marginally keeping pace with local demand as domestic crops look good this year.”
Palm oil futures in Malaysia traded 0.4 percent higher at 2,540 ringgit ($762) a ton at 4:09 p.m. in Kuala Lumpur today. Futures are poised for the first monthly decline in four. Soybean oil in Chicago was at 37.24 cents a pound, near the lowest level since July 2010.
