El Nino predicted to raise India's edible oil Imports and affect major crops in SE Asia

Warnings about the effect of the El Nino factor on the world’s food crops have grown. The latest is a prediction by the Associated Chambers of Commerce and Industry of India (Assocham) that India’s import bill for edible oils will grow by almost US$5 billion due to the El Nino effect.

Assocham said edible oil imports, currently standing at US$9.3 billion, will have shot up to US$14 billion by the time the 2013-14 accounts close if the prediction of deficient monsoon rains plays out. Furthermore, oilseed production is expected to drop this year by at least 8%.

In a published paper, Assocham said initial indications are that rainfall in the edible oil-growing states of Gujarat, Rajasthan, Madhya Pradesh, Maharashtra, Karnataka, Tamil Nadu, West Bengal and Andhra Pradesh will be deficient, hitting output which will in turn result in higher import dependence.

El Nino is a band of warm ocean water temperatures that periodically develops off the Pacific coast of South America and reduces rainfall across countries including China and India.

In Asia, which grows more than 90% of the world’s rice and is its main producer of coffee and corn, a drought-inducing El Nino could hit crops in Thailand, Indonesia, Vietnam, the Philippines and China.

Experts also warned that El Nino could deal another blow to wheat production in Australia, the world's second-largest exporter of the grain, which has already been grappling with drought in the last few months.

Assocham secretary-general D S Rawat said problems from reduced oilseed production could be exacerbated by increases in demand.

“The demand of edible oil will continue to grow by 15% per annum due to increasing income levels and fast changing eating habits in rural India,” said Rawat. “The demand for edible oil is likely to touch 2 billion tonnes during 2014-15.”