Rapeseed Output Rise Seen Cutting Vegoil Imports.

Rapeseed output in India's top producing state may jump 10 percent this year, cutting cooking oil imports of the world's top buyer by 500,000 tonnes in 2010/11, farm and trade officials said on Friday.

Planting in a larger area in Rajasthan has raised India's total rapeseed acreage by 11 percent to 7.2 million hectares as good rains ensured healthy soil moisture.

That has improved output prospects from the previous year when the worst drought in four decades ravaged farms and helped push international prices sharply higher.

In addition, lower temperatures this year could increase oil content of the crop -- which has the highest oil content of all oilseeds at 35-40 percent.

"The rapeseed crop is in good condition as low temperature has been aiding maturity," said S.K. Sharma, an assistant director at the northern state's farm department, told Reuters.

Rajasthan produces about half of the country's main winter oilseed crop. Sharma said the state's rapeseed output could rise to 3.2 million tonnes from 2.9 million tonnes in 2009.

He said the oilseed crop in Rajasthan was sown on 2.7 million hectares in 2010 from 2.2 million hectares in 2009.

Higher output of rapeseed will boost India's vegetable oil supplies and curb import growth despite a likely rise in local demand as the country's one billion plus population gets more spending power in an economy growing 8-9 percent a year.

"Higher rapeseed output is likely to increase domestic oil supply by at least 500,000 tonnes in 2010/11," said Jyoti Kanda, president of the Oil Millers and Traders Association in north Rajasthan.

Kanda said the cool weather conditions have given rise to the expectation of about 7 million tonnes of rapeseed output for the country in 2011, up 9.4 percent from 2010.

India imports half its annual domestic cooking oil needs -- mainly palm oil -- from Malaysia, Indonesia and a small quantity of soyoil from Brazil and Argentina.

The country's total demand for cooking oils is estimated at 15-16 million tonnes. In 2009/10 when a drought hit domestic oilseeds supplies, vegetable oil imports rose 4.5 percent to 9.2 million tonnes, the Solvent Extractors' Association data showed.

If imports fall in 2010/11 because of higher rapeseed output, that could put pressure on Malaysian palm oil futures, which gained 42.3 percent in 2010.

The benchmark palm oil contract on Bursa Malaysia Derivatives closed on Friday up 0.43 percent at 3,748 Malaysia ringgit ($1,228) a tonne.

Source : in.reuters.com