Volatile vegetable oil prices may prompt many importers to cancel their high-price orders, which could bring down edible oil imports by 5 per cent during this oil year (November 2008-October 2009). Moreover, shipments into the country have slowed down after Indonesia blacklisted about 30 Indian importers.
Industry estimates this year’s imports at about 6 million tonnes (MT) compared with 6.3 MT last year. However, the country would not face any shortage as a marginal (1 per cent) rise in the opening stock and a higher estimate of production will ensure adequate supply of edible oil, said analysts.
In anticipation of a rise in import duty, shipments of palm and soyoil into India had risen between September and October this year, taking the country’s imports in the previous oil year November 2007 to October 2008) hitting a record 6.3 million tonnes. The total opening stock this year is estimated at 1.02 MT compared with 750,000 tonnes last year, while the total edible oil production is forecast to increase to 7.17 MT as against 6.9 MT last year.
A rise in the per capita consumption of vegetable oil could see the overall offtake jumping by over 2 per cent to 13.10 MT tonnes this year compared with 12.83 MT in the previous year. With the government permitting export bulk edible oil, the total shipment from the country is expected to increase to 200,000 tonnes from 175,000 tonnes, with the stock closing for the year at 900,000 tonnes against last year’s 1.02 MT.
| SLIPPERY ROAD AHEAD India’s imports of vegetable oil (‘000 tonnes) | |||||
| Oil | 2004-05 | 2005-06 | 2006-07 | 2007-08 | 2008-09 |
| Soy | 2,027 | 1,770 | 1,335 | 750 | 300 |
| Palm | 3,169 | 3,000 | 3,665 | 5,270 | 5,255 |
| Sunflower | 5 | 90 | 200 | 30 | 150 |
| Laurics | 145 | 240 | 200 | 200 | 200 |
| Vanaspati | 200 | 300 | 215 | 50 | 100 |
| Total | 5,546 | 5,400 | 5,615 | 6,300 | 6,005 |
In 2007-08, the country’s per capita consumption increased slightly at 11.26 kg in comparison with 11.17 kg in the previous year as a result of strong economic growth. A cheaper crude palm oil (CPO) in the last quarter of 2007-08 appears to have stimulated consumption. The per capita consumption of vegetable oil steadily increased from 10.15 kg in 2003-04 and 10.52 kg in 2004-05.
Godrej International Director Dorab Mistry has projected that the scale of imports in 2008-09 would depend on the level of import duties.
Mistry forecast that the Indian government would raise import duty further, mainly looking at the plight of Indian farmers. Recently, the government levied a 20 per cent import duty on crude degummed soyoil, which constitutes about 15 per cent of the country’s total vegetable oil consumption.