India's Rapeseed Production Drops as Farmers Shift to Lucrative Crops by Amit Gupta, Kedia Advisory
India's rapeseed production forecast for MY 2024/2025 has been reduced to 11.7 MMT due to a 5% decline in harvested area, with farmers shifting to more profitable crops like wheat and pulses. Despite lower production, rapeseed yield remains stable at 1.3 MT/Ha due to improved soil moisture and better seed varieties. Higher Minimum Support Price (MSP) and lower stocks from the previous year have kept rapeseed prices elevated, with January 2025 prices ranging between INR 6,050-6,300/quintal. Meanwhile, rapeseed oil production has been revised lower to 4 MMT due to reduced seed availability, while sunflower oil imports are expected to drop significantly to 1.9 MMT due to increased import duties.
Key Highlights
* Rapeseed production forecast lowered to 11.7 MMT due to a 5% decline in acreage.
* Stable yield of 1.3 MT/Ha supported by better seed varieties and rainfall.
* Higher MSP and lower stocks drive rapeseed prices up to INR 6,300/quintal.
* Rapeseed oil production revised lower to 4 MMT, impacting supply.
* Sunflower oil imports expected to decline to 1.9 MMT due to higher import duties.
India's rapeseed production for MY 2024/2025 is forecasted at 11.7 MMT, a 5% decline from the previous estimate, as farmers shift to more profitable crops like wheat and pulses. The area harvested has decreased to 8.9 million hectares due to improved rainfall and increased profitability of alternative crops. However, rapeseed yields remain steady at 1.3 MT/Ha, supported by better soil moisture, efficient fertilizers, and high-yielding seed varieties like Pioneer.
The rise in rapeseed prices is attributed to a 6% increase in MSP to INR 5,950/quintal and lower stocks from the previous year. Prices in major markets ranged between INR 6,050-6,300/quintal in January 2025, marking an increase compared to the same period last year. Lower rapeseed availability has also impacted crushing demand, leading to a reduction in rapeseed oil production, which is now forecasted at 4 MMT. The decline in oilseed supply could result in higher rapeseed oil prices in the coming months.
Meanwhile, India's sunflower oil imports are expected to fall to 1.9 MMT due to the Indian government's increased import duties on edible oils. Higher global edible oil prices and domestic policy changes have contributed to a 32% decline in sunflower oil imports compared to last year. The shift in import policy is likely to encourage domestic oilseed production in the long run, but in the short term, it may lead to increased edible oil prices in the retail market.
Finally
Rapeseed production declines due to shifting cropping patterns, keeping prices elevated. Lower rapeseed oil output and reduced sunflower oil imports may tighten edible oil supply, supporting higher prices in the coming months.
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