Soya, Sunflower Oil Prices to Rise Due to Festivals

The US Department of Agriculture (USDA) report on low soya bean production has set on fire the soya oil market, with prices moving upwards to $1,270 per tonne from $1,230 per tonne on Friday. Sunflower oil, which India imports from Black Sea countries, has also seen an upward trend and is trading at the same level as soya oil. Traders in India say soya and sunflower oil will become costlier in the upcoming festival season as a large portion of demand will have to be met through imports. The Indian crop will enter the market by October end as the late monsoon has delayed harvesting. USDA has forecast soya bean production at 2.69 billion bushels, a 12% decline from last year. The expected yields of an average of 36.1 bushels per acre would be the lowest since 2003. The Black Sea countries — Russia, Ukraine, Romania, Bulgaria and Kazakhstan — reaped a record sunflower seed harvest of 22.5 million tonne last year. But due to an erratic weather condition, sunflower production has declined this year in this part of the globe. BV Mehta, ED of the Solvent Extractors' Association, said: "The scenario is not very good in India and abroad. Soya bean has been sowed in India but if rains do not continue till October, the yield will come down affecting production. Groundnut and sunflower sowing has been affected as there has been little rain in Karnataka and Maharashtra. Overall, prices of edible oil in the country will remain on the higher side." 

Imports of soya oil rose in July due to the arrival of delayed vessels from South America while sunflower imports fell, reflecting lower demand for fried foods during the summer. Soya oil imports in July are seen up 7.7% from June to 1,50,625 tonne while monthly sunflower oil imports were down by 11.8% to 77,500 tonne in July. Total July vegetable oil imports, including small amounts of nonedible oils, are likely to have risen by 4.7% to 8,20,500 tonne from June. 
"During the upcoming festival season, the demand for sunflower oil will increase as Indian housewives love the bright yellow colour of the sunflower oil," said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil consultancy firm. "Imports could rise to as high as 9,50,000 tonne in August," said a trader. Mehta said he expected edible oil imports in the oil season that will start from November to reach 9.5-10 million tonne, as against the earlier estimate of 9.1-9.2 million tonne. 
Soya Prices to Rise on US Drought 
WASHINGTON With the worst drought in half a century decimating crops in the US, the government on Friday slashed its estimate of the annual corn yield by about 17% in the last month to the lowest level since 1995. The crop will fail to replenish already-thinned commodity stockpiles and will translate into higher prices for goods like processed food, animal feed and ethanol, analysts said. "Unless there is normal weather and rain from here on out, I can easily see prices for corn and soya bean" rising another 20-25%, said Terry Roggensack, an analyst at the Hightower Report in Chicago. In the last month, as the government physically surveyed more than 25,000 farmers, the results forecast a drop in yields for soybeans, and lower production of eggs, milk and pork.— NYT