A lag in sowing in India's parched farms and the warmest winter in some areas in at least five years could hit rapeseed production and reduce its oil content, farmers and traders said, raising the prospect of higher vegetable oil imports. Prices of rapeseed, the main winter oilseed with the highest oil content, touched a record high in 2015 after India's first back-to-back droughts in nearly three decades and unseasonal rains hit output.
"This year the output of rapeseed will fall and the crop will also have less oil content due to warm weather and a lack of water," said Dinesh Garg, a farmer from the key rapeseed producing state of Madhya Pradesh in central India. Garg said his rapeseed acreage has shrunk to a third of what it was last season. India's overall rapeseed production could fall 7-8 percent, a trader in the top rapeseed-producing Rajasthan state said, from an estimated 5 million tonnes last year.
Indian farmers have cultivated rapeseed on 6.28 million hectares of land in the sowing season that began October 1, 2015, down 3.2 percent from a year earlier, according to data released by the federal farm ministry on Friday. Temperatures in northern and central India last month and so far in January have been the highest in at least five years for the period and will impact winter-sown crops, said G.P. Sharma, meteorology expert at private weather forecaster Skymet.
The government says it is trying to help. Federal Farm Minister Radha Mohan Singh said on Friday the Indian Council of Agricultural Research has been developing new varieties of seeds to tackle the effect of climate change on agricultural productivity. Singh also announced that New Delhi will launch its first major crop damage insurance scheme for farmers in the fiscal year starting April 1. Lower supplies of oilseeds may prompt India, which consumes 18-19 million tonnes of edible oil annually, to boost purchases of cheaper vegetable oils from top producing countries such as Malaysia and Indonesia.
In the marketing year ended October 2015, Asia's third largest economy made record imports of vegetable oil, its third highest overseas spend after crude and gold. Higher temperatures and a drop in sowing could also affect wheat production, though India has robust stocks of the grain.