- Unconventional Ag
Untimely Rain in India Could Lead to Increase in Palm Oil, Other Edible Oil Imports
Although recent rains in India’s northwest have brought down temperatures and could boost the oil yield from the region’s rapeseed crop, the weather for the rest of the month is key in determining output and projecting future import demand. If the rains continue, output will be negatively affected, increasing the chances that India will see another record year of edible oil imports.
Indian industry officials forecast edible oil imports could reach 12.5 – 13 million tons in 2014/15. This would be the third year in a row of record imports, after import levels reached 11.6 million tons for the year ending October 2014.
India meets 60% of its yearly edible oil demand of 18-19 million tons through imports and since the country’s rapeseed crop has the highest oil content, its size has great influence over the country’s pending edible oil import levels. For the coming crop year to June, farmers planted 16 million acres (6.5 million hectares) of rapeseed – an 8.5% decrease year on year due to dryness in the country’s main growing region in the northwest, and output is expected to be between 6.5 and 7 million tons compared to 7.4 million tons for 2013/14.
A drop in Indian domestic supply could support palm oil prices for Malaysia, which have climbed 5% this year after falling by 15% in 2014.