11/01/2010 (Bloomberg) - The mustard seed harvest in India may be smaller than a year earlier as dry weather reduced the planting area of the winter-sown crop, said an official at the nation’s biggest group of oilseeds processors.

Production may total 5.7-5.8 million metric tons in the March-April harvest, down from 6.2 million tons a year earlier, said Govindlal G. Patel, chairman of the crop committee of the Central Organization for Oil Industry & Trade, or COOIT.

A reduction in winter oilseed production may further strain edible oil supplies, increasing the need to purchase more abroad. Vegetable oil imports will reach a record 9.4 million tons this year after drought damaged peanuts and other monsoon-sown crops, the Solvent Extractors’ Association of India said Jan. 8. Palm oil has gained 30 percent in the past year on demand from China and India, the biggest consumers.

“Our prices will depend on international prices which are not going to soften unless the South American crop comes to the market in March-April,” said Patel, who’s been trading edible oil for over four decades. “We have to buy at a higher price.”

Mustard seed, planted in October and November, accounts for more than 70 percent of India’s output of winter oilseeds. Its yellow-colored oil is the third-most used cooking oil in India after palm oil and soybean oil.

The oilseed was sown on 6.4 million hectares (15.8 million acres) as of Jan. 7, down from 6.62 million hectares a year ago, the farm ministry said Jan. 8.

Production may total 5.5 million tons, said Devi Prasad Khandelia, managing director of Khandelia Oil & General Mills Pvt. He has been processing and trading oilseeds for more than two decades and is currently chairman of the mustard committee of the Solvent Extractors’ group.

India purchases palm oil from Indonesia and Malaysia, and soybean oil from Argentina and Brazil.