20/09/2014 (Hindu Business Line) - Vegetable oil prices, which are rising once again after falling to record lows in early September, are now likely to fall only after Diwali as domestic production steps-up on revival of monsoon in growing regions of Maharashtra, Gujarat and Madhya Pradesh, an expert said here on Thursday.

Due to abundant global supply of soyabean, cotton, rapeseed and sunflower crops, international price of these crops and their oil have come down in the last few months.

The US Department of Agriculture (USDA) has estimated higher soyabean crop in America and an all-time high rapeseed and sunflower crops in the EU.

Back home, cotton acreage is higher by 12 per cent compared to last year; while castor acreage is likely to rise by around 5 per cent by end of this month.

“Vegetable oil industry is facing pressure from both demand and supply side. Global supply of oilseeds crops is likely to increase due to higher output estimates from major producers such as the US, EU, Brazil and Argentina. Declining palm oil prices have put pressure on prices of edible oils,” said Raju Choksi, Vice-President (Agri Commodities), Anil Nutrients Ltd.

He said September rainfall in Maharashtra, Gujarat and Madhya Pradesh has improved the condition of soyabean, cotton and groundnut crops, while it will help rapeseed acreage in rabi season.

“Lower international prices of soyabean oil and sunflower oil have boosted their imports; while declining palm oil prices is putting pressure on domestic prices of these vegetable oils.”

However, markets for edible oils have started looking up since the last week and are likely to remain steady to firm in face of seasonal demands.

Prices may soften post-Diwali when domestic crushing peaks, he added.