"The government's estimate is usually inflated and with this government, even more so, as they want to cool down inflationary expectations and do not want traders to speculate unnecessarily," explains Vakil Biren, an Ahmedabad-based expert in agriculture commodities. The oil content in groundnut is expected to be 52-53 per cent, a normal occurrence.
However, if groundnut oil estimates sound a little exaggerated, most experts feel the government's soybean estimates are quite unrealistic. Soybean Processors Association of India (SOPA), the largest industry body of soybean extractors and traders, has pegged the 2016-17 soy crop at 10.87 mt, around 57 per cent more than last year's output. Yet, it is 31 per cent less than the Centre's estimate of 14.22 mt.
"Last year, according to SOPA, India's soybean production was 6.92 mt due to poor rains and this year it is expected to be higher because of good rains in all the major soybean growing states," SOPA President Davish Jain said.
Madhya Pradesh, the country's largest growing state, is expected to produce 5.58 mt, in comparison with 3.41 mt in 2015-16. In Maharashtra, the output is expected to be around 3.6 mt as against 2.20 mt last year. According to Rajesh Agarwal, former president, SOPA, while there has been a shift towards pulses in the state, soybean production hasn't been impacted significantly.
Commodity analysts are sceptical as well. "Our estimate of the crop is not more than 9.5-9.7 mt, much less than the Centre's figure of around 14.22 mt," said Aurobinda Prasad Gayan from Kotak Commodities.
The government's estimates could go haywire because imports of edible oil (starting November 1) in 2016-17 is expected to be around 15.3 mt, up from 14.60 mt - a five per cent increase. Of this, palm oil is estimated to be around 9.3 mt, while the rest would be made up of soybean oil, sunflower oil etc.
On the rabi mustard crop, sowing for which will start in the next few weeks, Patel said it is going to be good as there is good moisture in the soil because of delayed rainfall.
According to experts, exaggerated estimates have serious implications as they could lead to more-than-expected edible oil imports. With India highly dependent on imports for its annual requirement of edible oils, far-fetched estimates create distortions in the market.