Rapeseed is the main Rabi/winter-sown oilseed crop in India.
But pulse prices (and government policies) seem to be winning acres over.
The USDA is currently forecasting Indian rapeseed production at 6.5 million tonnes. That’s down from their previous forecast of 7.2 million tonnes, after it became apparent how many less acres were getting seeded this Rabi season than originally thought.
Specifically, it was first estimated that Indian farmers would plant 17.8 million acres of the oilseed (which is mostly processed into rapeseed / canola oil
But with 13.7 million acres planted as of December 1st, that’s nearly 10% behind last year’s pace.
As such, the feeling is that final landmass planted to rapeseed is likely to come in at 16.1 million acres, similar to last year’s area.
Also, last year, India produced a record crop 6.73 million tonnes. However, poor returns and the fact that most farmers sold their crop at lower levels before the import tax was introduced.
Why was there a tax?
Edible imports in 2016/17 by India were a record, which put pressure on domestic prices.
Despite the import tax though, lower soybean and rapeseed production, combined with higher consumption means that there’s a strong likelihood India’s edible imports could reach another new record in 2017/18.
Overall, while there’s lots of vegetable oils to choose from, we do know the amount of canola / rapeseed is lower than in year’s past.
India’s rapeseed output to drop 10 pct as farmers trim plantings -trade body
MUMBAI, Dec 5 (Reuters) – India’s rapeseed and mustard output is set to drop by at least 10 percent for the 2017/18 crop year as scanty rains and high temperatures prompted farmers to switch to other crops despite a recent hike in the import duty on edible oils, trade officials said.
Rapeseed is typically processed into canola oil and is the main winter-sown oilseed crop in India. Lower rapeseed output could require the world’s biggest edible oil importer to raise overseas purchases of palm oil, soyoil and canola oil. India imports about two-thirds of its edible oil demand.
“The reduction in area suggests at least a 10 percent drop in the production. The output could be even lower if weather remains adverse,” said B.V. Mehta, head of the Solvent Extractors’ Association (SEA), a Mumbai-based trade group for oilseed processors.
Farmers have cultivated 5.55 million hectares (13.7 million acres) of rapeseed as of Dec. 1, down 9.5 percent from a year ago, data compiled by Ministry of Agriculture and Farmers Welfare showed.
Farmers reduced the area under oilseed cultivation in Rajasthan, the country’s top rapeseed producing state located in India’s northwest, because of higher temperatures and lower moisture levels at the time of sowing, said Managing Director of trading firm G.G. Patel & Nikhil Research Company, Govindbhai Patel.
“Higher temperatures hit germination of seeds. This year yields are likely to be lower than normal,” Patel said.
India produced a record 6.73 million tonnes of rapeseed during the 2016/17 marketing year that ended on Oct. 31, the SEA said.
To boost oilseed crop cultivation and reduce edible oil imports, India last month raised the import tax on edible oils to the highest in more than a decade.
But the decision came too late to change sentiments hit by a drop in rapeseed prices, said Vijay Data, an oil miller.
“Rapeseed gave poor returns to farmers last year. Before the import duty hike most farmers had sold their crop at lower levels,” Data said.
Edible oils imports, including palm oil and soyoil rose to a record in the 2016/17 crop year, which dampened local prices of rapeseed and soybeans during 2017.
The country’s edible oil imports could rise to 15.5 million tonnes in 2017/18 marketing year that started Nov. 1, up from 15 million tonnes a year ago, said a Mumbai-based dealer with a global trading firm.
“Output of soybean was down. Now you will have lower rapeseed crop. On the other hand consumption is going up. So there is no option but to raise imports,” the dealer said. (Reporting by Rajendra Jadhav; Editing by Christian Schmollinger)