India’s cooking oil imports in oil year 2008-09 (November-October) are expected to remain unchanged from 5.0-5.5 million tonnes estimated in the current year, provided the rapeseed crop is good, Davish Jain, chairman, Central Organisation for Oil Industry and Trade said.
“We may expect edible oil imports for the next oil year hovering around the same level as in the current year. I don’t see any increase,” Jain said. “But this is subject to good production prospects of rapeseed. This year we imported more (edible oil) as rapeseed production was not up to the mark due to unsuitable weather,” Jain said.
He said edible oil imports in the current year, which ends in October, is expected be around 5.0-5.5 million tonnes.
India annually consumes around 12.0 million tonnes and it imports almost 40 per cent of its cooking oil requirement in the form of palm oil from Indonesia and Malaysia and soyoil from Argentina and Brazil.
Demand for cooking oil in India grows almost 5 per cent annually to cater to the needs of rising population.
“The incremental need will be met by increase in indigenous production,” Jain said. Jain said domestic cooking oil consumption this year may have dropped as palm and soyoil prices skyrocketed in the early part of this year in tandem with a flare-up in crude oil prices.
Edible oil prices are closely linked to crude oil prices because of their diversion to make biofuels. “The kharif oilseed crop (summer sown) condition is satisfactory. We hope the same production level in rapeseed, which is a rabi crop,” Jain said.
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Kharif acreage increased by 2 per cent this year, mainly because of higher acreage under soybean.
Soyoil demand
According to Solvent Extractors’ Association of India’s data, India imported 4.2 million tonnes of edible oils during November-August. Out of this, palm oil imports stood at 3.6 million tonnes and soft oil imports at 517,001 tonnes, including 505,984 tonnes of soyoil.
India imported 1.04 million tonnes of soyoil in the same period a year ago. Recently, palm oil prices have plunged in international markets taking clues from weakening crude oil prices.
Soy oil prices also fell along with palm oil, but by a lesser margin.
“Soy oil (price) has not gone down as much as palm oil prices. But, it may shed some value, even in international markets. We may not import 200,000 tonnes in September and October, because palm oil is preferred now,” Jain said.
There were expectations earlier that India would import 200,000 tonnes of soy oil to meet festival demand in September and October.
“Total soy oil imports for the current year would be somewhere between 600,000 and 700,000 tonnes. I don’t think the (soy oil) imports will be up next year because of price parity in palm oil. Palm oil will substitute soy oil demand to some extent,” he said.
Soymeal exports
Good soybean crop has encouraged Indian traders to sign contracts for export of soymeal from the new crop, but the volume is still low as sellers are waiting for better prices.
Traders have so far signed deals for export of 350,000 tonnes of soymeal to Southeast Asian countries, far less than the 650,000 tonnes exported around this time last year.
Indian exporters have been lowering the export price for soymeal this year with the increase in global stock and Argentina, the largest exporter, quoting lower rate.
However, Jain was hopeful of good soymeal sales on higher demand and superior quality of Indian meal.
Jain said Indian soymeal exports in new oil year may touch 6 million tonnes, including meal by surface transport to countries in the Indian subcontinent.
“India would continue to be major supplier for soybean meal, at least for next six months. Demand from Asian markets is still wide open for Indian soymeal.”