Tue Oct 20, 2009 3:19pm IST
* India's rapeseed output may fall 5-7 pct
* Warm weather, dry soil, water scarcity to hit output
NEW DELHI, Oct 20 (Reuters) - India's rapeseed output may fall up to 7 percent as warm, dry weather has hit sowing, but the estimate may change after the government announces its wheat purchase price, which will influence farmers' choice of crops.
Planting of early-sown grades of rapeseed has fallen sharply in Rajasthan, the main producing state, because of low soil moisture and abnormally high temperatures.
"The delay in planting could lower rapeseed output by 5-7 percent, and may push cooking oil imports up by 10 percent," said Jyoti Kanda, director of Sriganganagar-based trading firm Kanda Edible Oil, whose estimates are keenly watched by traders.
Kanda, the president of the North Rajasthan Oil Millers and Traders Association, an oilseed crushers' body, told Reuters the estimates of lower output and higher imports were based on the state farm department's initial outlook for the crop.
Traders said lower Indian output may boost imports of palm oil and support Malaysian palm oil futures, which hit a five-week high on Monday.
The worst June-September monsoon since 1972 and warm weather have delayed planting and stirred worries about irrigation as only a third of the state's reservoirs have enough water.
An edible oils trader said the sowing was likely to pick up within a few days, as the temperature was likely to dip below 30 degrees Celsius from 32 to 36 degrees in recent weeks.
Govindlal Patel, who has held senior positions in industry bodies, said traders were keenly watching the progress of rapeseed planting in the next three weeks.
"It's too early to comment on how production ultimately turns out. It could even be higher than the initial estimates, if here farmers plant oilseeds instead of wheat," Patel said.
The government is expected to shortly announce the price at which it will purchase wheat from farmers, which will help them decide whether to plant wheat or rapeseed.
Last week, a farm official from Rajasthan said rapeseed was sown over a 2 percent area in the state so far, because of the high temperatures as compared to the normal 30 percent.
Rajasthan has set a target of 2.6 million hectares for the rapeseed crop this season, down 3.7 percent from 2.7 million hectares last year.
The state farm official said rapeseed was expected to be sown over an area of about 2.5 million hectares in the 2009/10 crop year.
India, the world's fourth biggest producer of the rapeseed, the main winter sown oilseed crop, produced 7.4 million tonnes in 2008/09, up 28 percent from 5.8 million tonnes previous year.
India's vegetable oil imports are projected to soar to a record 8.5 million tonnes in 2008/09 from 6.3 million tonnes in the previous year.
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