Cottonseed Oil Market Outlook: Stability Amidst Changing Sowing Patterns

7/29/2024 9:09:31 AM

(MENAFN- Adfactors PR) The cotton yield this season has surpassed expectations, marking a successful harvest for the industry. Historically volatile, the sector has experienced stability over the past few months, a trend likely to persist for the next 3-4 months. This abundant supply has benefited consumers, stabilising prices of this essential commodity. However, a price increase of Rs 5-6 per litre in cottonseed oil is anticipated during the festive season due to heightened demand.

Industry participants warn that this year's sowing patterns may impact next year's cotton yield. As per the latest data from the Solvent Extractors’ Association of India, sowing of cotton in 2024 has been carried out in 102.05 lakh hectares until July 19, a dip of approximately 3.61 per cent compared to 105.66 lakh hectares in 2023.

Mr. Priyam Patel, Managing Director of NK Proteins Private Limited, on the sidelines of an event organised by Indian Vegetable Oil Producers’ Association, said, “There has been a noticeable shift in sowing preferences towards groundnut, other grains, and millets. In regions like Punjab, farmers are reluctant to sow cotton due to anticipated damage from pink bollworms. This shift may cause market volatility in the supply and demand of cottonseed oil next year.”

Both government and private players are actively promoting alternative oils, such as rice bran oil, which faces fewer supply issues compared to other crops. Supported by Minimum Support Prices (MSPs) and effective marketing, rice bran oil's demand is rising. Its health benefits and competitive pricing are key factors driving consumer awareness and preference.

The sector experienced significant volatility earlier this year due to global factors. However, recent stabilisation has brought relief to many households. The government's efforts to promote diverse oilseeds and the increasing popularity of health-oriented options like rice bran oil are reshaping consumer choices and influencing sowing decisions.

Mr. Patel further elaborates, “The health benefits of rice bran oil and its consistent availability are making it a preferred choice among consumers. This shift in consumer preference is encouraging farmers to diversify their crops.”

As the edible oil sector stabilises, stakeholders remain vigilant of market trends and consumer behaviour. The ongoing efforts to diversify and promote alternative oils are expected to mitigate some of the volatility experienced in the past, offering a more balanced outlook for the industry.

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