RI may export more palm oil to India

RI may export more palm oil to India

Kartik Goyal and Pratik Parija, Bloomberg/New Delhi

Indonesia, the world's second-biggest exporter of palm oil, may this year ship 11 percent more of the edible oil to India, whose oilseed production is expected to lag last year's levels after a delayed start to the rainy season.

Indonesia may ship as much as two million metric tons of palm oil to India this year, compared with 1.8 million tons in 2004, Derom Bangun, chairman of the Indonesian Palm Oil Producers Association, told reporters in New Delhi on Monday.

"We have noted that production in India is going to be down due to climatic problems," he said. Indonesia's palm oil production may rise 11 percent to 13.6 million tons this year from 12.2 million tons a year earlier, he said.

An increase in imports of palm oil by India, the world's fourth-biggest user of the commodity, may mean higher prices in countries such as Malaysia and Indonesia. Palm oil prices on the Malaysia Derivatives Exchange in the Kuala Lumpur have declined 3.4 percent since January, after plunging 22 percent in 2004. Palm oil makes up for 80 percent of India's edible oil imports.

India's oilseeds output from the monsoon crop may lag last year's 14.93 million metric tons after planting was delayed in Madhya Pradesh, the nation's biggest soybean-growing state, and floods flattened soybean crops in Maharashtra, Atul Chaturvedi, president of Adani Exports Ltd., a commodities supplier in Gujarat state, said on Aug. 4.

Farmers delayed crop-planting after the monsoon arrived five days late and rains were patchy. Rains in June were 15 percent below-average, according to the agriculture ministry. Monsoon rains provide 80 percent of India's annual rainfall.

Sowing of all oilseed crops including soybean and groundnut lagged year-ago levels by 2.4 percent as of July 29, the farm ministry said on Aug. 1.

Mumbai, Maharashtra's capital, received 949 millimeters of rains on July 26, the heaviest downpour anywhere in India in a century. The deluge led to floods and landslides that killed at least 987 people in Maharashtra, the country's second-biggest soybean-growing state.

Oilseeds are crushed to make vegetable oil and livestock feed. Crops grown during the monsoon season are mostly planted in June and harvested from mid September through November.