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Poor rains could hit India's oilseeds output

The absence of the second spell of monsoon rains in India's main oilseed growing regions was causing concern and any further delay could endanger the crops, traders said on Monday.

The four-month southwest monsoon rains arrived over Kerala in early June and covered the oilseeds producing states of Maharashtra, Gujarat and Madhya Pradesh, but has failed to progress since the end of June.

Weather officials said most parts of the country had a very good first spell of rains but the second spell was still to come.

"The beginning of the monsoon was good but the country has not received enough rains in July," said a weather official in western India. "We are going through a weak phase."

He said the monsoon should have covered the entire country by mid-July.

The arrival of the monsoon rains has also been delayed by nearly a fortnight in some large grain-growing northwestern parts of Uttar Pradesh, Punjab and Haryana states. But it is not likely to impact the rice and wheat crops because of good irrigation facilities in the region.

The rains usually bring cooler weather and are vital for India's agricultural sector, which accounts for 25 per cent of gross domestic product and provides employment to 70 per cent of its one billion people.

Oilseed Crops

Traders said oilseed sowing was complete in large areas of the soybean producing states of Madhya Pradesh, groundnut producer Gujarat, and in Maharashtra, which grows both groundnut and soybean in smaller quantities.

"The delay in the second spell of rains in the oilseeds growing regions is a cause of concern. After a week it will be a cause of worry," said B V Mehta of the Solvent Extractors Association of India.

He said if some rains do not fall in the next few days, the standing crops will burn out and hit overall yields.

"By this time there should have been some showers, which are crucial for the soybean crop at the early growth stage," said O P Goel, chairman of the Indore-based Soybean Processors Association of India (SOPA).

Goel said soybean has been planted in about 40 per cent of the total area in the state but the crop, which is normally 12 inches by now, was only six inches this year.

India annually produces about 5.5 million tonnes of soybean and exports 2.2-2.5 million tonnes of soymeal to countries such as South Korea, Indonesia, the Philippines, Thailand and Japan.

A Weather Services Corp. meteorologist said in Chicago last week that adverse weather could cause harm to some crops in parts of China and India along with portions of Ukraine and southern Russia.

Bipin Patel, a Gujarat-based oilseeds trader, said the germination of groundnut seeds sown in the state was 25 per cent lower than normal and yields would be hit if the rains do not come this week.

Mehta said palm oil prices had firmed up in the Malaysian markets foreseeing some greater Indian oil import demand in the event of a smaller oilseeds crop.

Palm oil futures ignored poor exports data for July 1-15 and broke the 1,385 ringgit resistance to end Monday's morning session at 1,422 ringgit a tonne, up 49 ringgit after the CBOT soybeans surged in Asian trade on concerns about dry weather.

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