* January temperatures hold key to output
* Higher rapeseed oil supply to cut import demand
By Ratnajyoti Dutta
NEW DELHI, Nov 21 (Reuters) - India could produce up to 13
percent more rapeseed oil in 2014 as farmers take advantage of
monsoon-soaked land to grow the more lucrative crop, traders
said, which would help curb imports and its trade deficit.
Rape needs damper conditions than do other crops such as
wheat or guar gum, and this year's monsoon was heavier than in
Traders expect rape acreage to rise by 4.5 percent to 7
million hectares and output of rapeseed to reach 6.7 million
tonnes from 6.4 million.
That would boost rapeseed oil production by 13 percent to
2.6 million tonnes, they estimate.
Increased domestic rapeseed output could help India, top
global importer of edible oils, rein in its purchases of palm
oil from Indonesia and Malaysia next year.
"Rapeseed oil supplies could be about 300,000 tonnes more in
comparison to last year," Sandeep Bajoria, chief executive of
the Mumbai-based Sunvin Group, said.
India's edible oil demand totals 17-18 million tonnes a year
and is growing by 3 to 4 percent a year. Imports usually account
for about 60 percent of consumption and weigh on its bulging
current account deficit.
Rapeseed planting usually starts from October in the world's
third-biggest producer after China and Canada, and farmers have
already planted over 4.5 million hectares. The harvest starts
Prices are already up 7 percent from the start of the
planting season, with levels quoted in Rajasthan at 36,550
rupees ($580) per tonne.
The desert state of Rajasthan is the main producer of
rapeseed, providing more than half of total output. But in last
year's drier conditions, many farmers turned to guar, which
requires less rain and has been in strong demand due to its role
in the extraction of shale gas.
Rapeseed produces both oil and meal, making returns better
than wheat, which also needs more rainfall while it grows.
"Rapeseed is preferred this year over other winter crops
like wheat and guar," said Deepak Kanda, president of the Shri
Ganganagar Oil Millers Association in Rajasthan.
Some traders voiced concerns, however, that cold weather
could still crimp rapeseed output.
"Weather conditions in January will hold the key to the
crop's output size," said Govindbhai G. Patel, managing partner
of G G Patel & Nikhil Research Co.
Annual demand for cooking oils in Asia's third-largest
economy is growing by at least half a million tonnes a year as
it adds about 19 million people to its population and its middle
class becomes increasingly wealthy.
India's cooking oil imports rose 4 percent to a record of
10.4 million tonnes in the year to October.
($1 = 62.545 Indian rupees)
(Editing by Jo Winterbottom and Jane Baird)