USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed
23 April 2012
INDIA: TOTAL OILSEEDS PSD
Assuming normal monsoon rains and favorable growing conditions, total oilseed  production in MY 2012/13 (Oct-Sep) is likely to grow 3 percent to 36.3 million tons. With competition from summer planted coarse cereals and winter planted wheat, chickpea and lentils, prevailing market prices of soybean, rapeseed-mustard, and peanut in current season should encourage farmers to bring a larger area under production. Total oilseed production for current and previous year reflects revised estimates based on updated figure for planting from Indian Ministry of Agriculture.
Oilseed production in India is mostly rain-fed, and is an important source of livelihood for small and marginal farmers in the arid and semi-arid areas of the country. During the twelfth five-year plan period, the Government of India has provided, through its „National Mission on Oilseeds and Oil Palm (NMOOP),? various support and incentive programs for oilseed growers. NMOOP replaces the old Integrated Oilseeds, Oil Palm, Pulses and Maize Development program, which was under implementation in 14 major states for oilseeds and pulses, 15 for maize and 9 for oil palm. As agriculture is a state subject, the central-government program is likely to supplement efforts by state governments to enhance oilseed production and productivity.
Rising oilseed production is supporting oilseed consumption for both food and feed (comprising of seeds retained for sowing/re-sowing operation, feed and industrial usage). In the Union budget for fiscal (April-March) 2012/13, excise duty on all processed soya food products has been reduced to the merit rate of 6 percent, thus encouraging higher sales of soy-based food products for upcoming season. Growing utilization of soybeans for the manufacture of soy and soy-based food products, peanuts for direct table use and snack food purpose and rapeseed for curry, culinary and sauce preparations will likely increase food usage of oilseeds in MY 2012/13 to 1.9 million tons. Feed consumption of oilseeds will likely remain at 4.9 million tons in MY 2012/13, largely driven by cottonseed; forecast at 3 million tons.
India exports small to moderate quantities of Indian Hand Picked Select (HPS) peanuts, followed by sesame, small quantities of niger seed, safflower seed and rapeseed. Although the volume of Indian oilseed exports is relatively small, the total value is $800 to $850 million. Oilseeds can be imported into India without any quantitative restrictions, but high tariffs and complex phyto-sanitary regulations can limit imports.
A forecast for higher peanut production in 2012/13 coupled with growing demand of Indian Hand Picked Select (HPS) peanuts in South-East Asian and other neighboring countries could raise Indian peanut exports to 500,000 tons in 2012/13, up 50,000 tons from the current year. Traditionally, Indonesia and Vietnam are among the largest importers of Indian peanuts followed by Asian, Middle East and European countries. Joint efforts of the Indian Oilseeds and Produce Export Promotion Council (IOPEPC) and Agriculture and Processed Food Products Export Development Authority (APEDA) to increase awareness of quality improvements in peanuts is not only lending support to peanut exports, but also helping exporters to focus on adopting international quality standards. IOPEPC is the authorized agency to issue quality certificates for shelling units and warehouses involved in exports, while APEDA certifies processing units.
Similarly, anticipating higher domestic production of sesame seed in 2012/13, exports are likely to grow 6 percent to 450,000 tons. South Korea is the largest importer of Indian sesame seeds followed by Vietnam, United States, China and Turkey.
Growing domestic consumption and larger crush of oilseeds in 2012/13 is expected to keep stocks relatively tight compared to current marketing year. Procurement of oilseeds by government agencies such as the National Agricultural Cooperative Marketing Federation of India (NAFED) is likely to be low as open market prices of major oilseeds in 2011/12 were higher than the government?s minimum support price. Even privately held stocks are likely to remain low.
INDIA: TOTAL OILMEALS PSD
An estimated 80 percent of the total oilseeds produced in country is usually crushed to produce oilmeal for food and feed use. However, depending on domestic production of oilseeds and export demand for oil meals, this proportion may vary. Anticipating a larger oilseed crush in 2012/13, the total oil meal production is likely to be higher at 17.3 million tons, up 2 percent over current marketing year (2011/12). Strong export demand of oilmeal in 2010/11 led to higher than expected crushing of oilseeds, drawing down stocks carried forward for current year and subsequently constraining availability for crushing in MY 2011/12.
Assuming no major animal disease outbreaks, total feed utilization in 2012/13 is forecast at 11.5 million tons, which includes 3.6 million tons of cottonseed meal (mostly used in livestock feed), 3.2 million tons of soybean meal, 2.4 million tons of rapeseed meal, 1.8 million tons of peanut meal, and 549,000 tons of other oil meals.
Lower availability of oilseeds for crushing into meals and high prices of animal feed in 2011/12 has constrained feed use to 11.3 million tons, down 800,000 tons over last year. Higher feed prices in the recent past have raised serious concern over the rising cost of meat, milk and eggs. While price increases may temporarily restrict demand, the expansion trend in the dairy, livestock and poultry sector will continue to fuel future demand for animal feed. India?s organized feed industry consumes soy meal, as well as peanut, sunflower seed, and rapeseed meals in feed formulations.
As soy meal is a rich source of protein, India?s traditional food industry is seeking ways to expand the market. Texturized soy protein (TSP), which is a defatted soy flour product, can be extruded into various shapes (chunks, flakes, nuggets, grains) and sizes and used as vegetarian substitute for meat. Defatted soy flour is used to fortify other food products (wheat flours, biscuits etc). Soybean meal is also best for extracting soya protein isolate (which usually has more than 90 percent protein content) and can be used for the manufacture of healthcare products.
In the Union budget for fiscal year 2012/13 (April-March), the Government of India has set aside special programs funds for the National Program for Mid-day Meal for School Children, the Integrated Child Development Service, the Rajiv Gandhi Scheme for Empowerment of Adolescent Girls, and various other schemes to provide protein rich nutritious food to women and infants. In the past, different state governments (Andhra Pradesh, Gujarat to name few) have also undertaken programs to increase the utilization of low-cost high-protein supplements derived from soybeans.
Assuming competitive prices and strong overseas demand for Indian oil meals, oil meal exports in 2012/13 are expected to rise to 5.5 million tons  , marginally higher than the current year estimate of 5.4 million tons. Stabilizing exchange rate could further facilitate exports of Indian oil meal. Export data for first five months of MY 2011/12 indicate a 12 percent decline over the corresponding period in the previous year (Table 4) due to poor demand in the traditional importing countries (please refer to GAIN Report IN2030 for more details).
Indian rapeseed meal is increasingly marketed as an organic product. Other oil meals such as castor, linseed and mustard are sold as organic pesticides against nematodes and insects. Indian meal exporters have a competitive advantage in geographic proximity to major markets in Asia and the Middle East, and are able to ship higher protein content (48 percent in soybean meal) non-GMO products in small vessels. While there are no quantitative restrictions on oil meal imports, the 30.6 percent import duty and the ample domestic availability of cheaper feed materials discourage imports.
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