WASHINGTON (June 07 2003) : The US Agriculture Department's attache in NewDelhi released the following report, dated May 29, on the production ofoilseeds in India. Attache reports are not official USDA data.

Report Highlights: Post forecasts MY 2003 oilseeds production to reboundto 26.1 million tons on higher planting.

MY 2003 imports are anticipated to decline to 4.9 million tons due toincreased domestic production.

Post reduces MY 2002 oilseeds production to 19.5 million tons due to alarger than anticipated drought effect.

Total Oilseeds: Post forecasts MY 2003 oilseeds production to rebound 34percent to 26.1 million tons, assuming normal rains adequately spread tosupport the Kharif and Rabi oilseed crops through their crucial growthstages.

The current high prices for most oilseeds bode well for higher oilseedplanting, estimated at 31 million hectares.

Owing to a larger than anticipated effect of drought on production of boththe Kharif and Rabi crops, Post reduces the MY 2002 oilseeds productionestimate to 19.5 million tons.

Exports of oilseeds in MY 2003 are likely to recover to 100,000 tons fromthe anticipated decline in the MY 2002 production of exportable qualitypeanuts due to the prevailing dry conditions.

Total Oiomeals: MY 2003 oilmeals production is forecast to increase by 41percent to 12.3 million tons, following anticipated higher oilseedproduction and improved export demand.

Consumption in MY 2003 is forecast to show strong growth, as well,improving 27 percent over its low in MY 2002.

Exports are forecast to rebound to the 3 million ton mark, due to anexpected weakening of domestic prices. MY 2002 exports of oilmeals areestimated to decline steeply by 52 percent to 1.5 million tons, due to aforecast decline in domestic production and higher domestic prices vis-…-vis the international markets.

The domestic prices of major oilmeals, such as soy meal and peanut meal,are currently at $ 253/ton and $ 210/ton, respectively, keeping them outof the less remunerative export market.

However, prices are forecast to soften with anticipated higher productionduring MY 2003.

Higher prices of oilmeals during MY 2002, coupled with poor returns fromdairy and poultry farming, led to a contraction in domestic oil mealconsumption, currently estimated at 7.4 million tons compared with 8.4million tons in MY 2001, as producers shifted to cheaper alternativeprotein sources.

Total Oils: Post forecasts India's MY 2003 edible oil production at 5.6million tons, due to increased domestic edible oil production.

MY 2003 imports are forecast to decline by 9 percent to 4.9 million tonsas a result of increased production.

Palm products are likely to hold a lion's share of total edible oilimports during MY 2003 due to their logistical advantages, lower prices,contractual flexibility, and wider acceptance among Indian consumers.

Edible oil prices in the domestic market are expected to decline on theforecast increase in domestic production during MY 2003.

Stocks are forecast to rebound to 550,000 tons by MY 2003 on increasedproduction and arrivals.

Post estimates India's MY 2002 edible oil production to decline by 20percent to 4.2 million tons, due to the decline in domestic oilseedproduction compared with the previous year.

Lower production is likely to result in higher edible oil imports duringMY 2002, estimated at 5.3 million tons, and lower ending stocks estimatedat 200,000 tonnes.

Edible oil prices are currently 33 - 59 percent above last year's prices,in line with firm international markets and the estimated shortage indomestic production.

A decline in rural incomes, high import tariffs on edible oils, and firminternational prices during MY 2002 are likely to result in a decline inper capita consumption to 9.4 kilograms (forecast to recover to 9.6kilograms in MY 2003).-Reuters