The Hindu Business Line : Oilseed prices at 10-year high in global market on lower crop

GLOBAL prices of oilseeds, particularly soyabean, have increased steeply and hit a 10-year high. According to Mr S. Sivakumar, Chief Executive of ITC International Business Division, the prices have gone up, as the crop output was lower in South America.

As the international prices of grain and oilseeds were high, export of these products would not be an issue despite an 8 per cent appreciation of rupee vis-à-vis the dollar. The rupee's appreciation, however, would impact the export of horticulture, aquaculture and other products, the prices of which were not high in the global market, Mr Sivakumar told Business Line.

Last month, the international prices of soyabean ranged from $351 to $413 per tonne (PT) as against an average price of $245 (PT) in 2002-03. Similarly, the price of groundnut last month was around $437 PT (last year average price $415 PT) while that of sunflower seed stood at $284 PT ( $265 last year). The current prices of rapeseed, copra and linseed were around $343, $450 and $399 PT as against $285, $287 and $307 PT respectively in 2002-03.

The global soybean production forecast was reduced by 5.5 million tonnes to 193.4 million tonnes. This is below the level reached in 2002-03 and is responsible, along with strong demand, for the higher soybean prices currently being experienced.

The US Department of Agriculture has stated that the Brazil's 2003-04 soybean production forecast was reduced by 3.5 million tonnes to 56.0 million tonnes this month. Though higher than last season's 52.5 million tonnes, dry weather led to reduced yields in many production areas this year. Declines were also noted for Argentina, down 1.5 million tonnes to 35.0 million tonnes, and Paraguay, down 500,000 tonnes to 4.0 million tonnes.

Due to lower supplies, both soyabean export and crush forecasts were reduced this month. World soyabean export volume is now expected to barely exceed the 2002-03 levels at 62.7 million tonnes, 2.2 million tonnes below last month's forecast. Crush was also lowered 2.1 million tonnes this month to 172.9 million tonnes.

Changes in April for other oilseeds were much smaller relative to soyabeans. Canada's rapeseed export forecast was reduced 100,000 tonnes with a compensating increase in crush for 2003-04. In addition to the lower soyabean meal production, down 1.7 million tonnes, production forecasts for cottonseed, rapeseed, fish and peanut meal were also lowered in April.

Despite the lower crush, forecast trade in oilseed meals was increased nearly 100,000 tonnes due to increased palm kernel meal exports. The soybean, cottonseed, and rapeseed meal trade forecasts were all reduced in April, while increases in sunflowerseed, fish, and peanut meal helped push global trade higher.

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