 "Dependence on imported edible oil to hit new high")
Despite the increase in oilseed output, India’s dependence on imported edible oil is set to hit a record high this year. The increasing direct consumption of oilseeds, including soybean, mustard seed and groundnut, has reduced their supplies available for crushing.
This oil year (October 2013-November 2014), the share of imports to overall edible oil consumption is likely to hit 65.3 per cent, against 61.2 per cent in the previous year, data compiled by the US Department of Agriculture show. India’s overall edible oil import is likely to stand at 11.8 million tonnes (mt) this year, against 10.7 mt in the previous year. The edible oil import bill may exceed the benchmark Rs 60,000-crore mark; last year, it stood at Rs 57,500 crore.
“Every year, fresh addition to India’s existing edible oil consumption stands at 0.8-0.9 mt because of an increase in the population and lifestyle changes. However, at seven-eight mt, edible oil production from domestic sources has remained stagnant for the past few years. As such, dependence on imports will continue until production from domestic sources is stepped up,” said B V Mehta, executive director, Solvent Extractors’ Association.
According to an India Ratings report, total edible oil production from domestic sources for 2013-14 is likely to stand at 7.6 mt, a marginal rise compared to last year’s 7.5 mt.
For the November 2013-March 2014 period, overall edible oil import fell six per cent to 4.3 mt from 4.6 mt in the year-ago period. “As the crushing of last year’s kharif oilseeds was underway in full swing, imports were suppressed. With the lean seed-crushing season, import will move up,” said Pradeep Chowdhry, managing director of Gemini Edibles & Fats India, a Hyderabad-based subsidiary of Ruchi Soya Industries.
The financials of edible oil companies are likely to improve in the coming quarters, owing to higher revenue growth on account of increased high sea sales and refinery sales. With an increase in the proportion of the higher-margin refinery sales to overall sales, the profitability and margins of companies are likely to improve significantly in 2014-15 compared to the levels seen in 2013-14 and 2012-13, India Ratings forecasts. The agency expects fully integrated refiners with wider product portfolios to benefit more than those with limited product diversification. Companies whose portfolios include branded products will see additional gains.
This oil year (October 2013-November 2014), the share of imports to overall edible oil consumption is likely to hit 65.3 per cent, against 61.2 per cent in the previous year, data compiled by the US Department of Agriculture show. India’s overall edible oil import is likely to stand at 11.8 million tonnes (mt) this year, against 10.7 mt in the previous year. The edible oil import bill may exceed the benchmark Rs 60,000-crore mark; last year, it stood at Rs 57,500 crore.
“Every year, fresh addition to India’s existing edible oil consumption stands at 0.8-0.9 mt because of an increase in the population and lifestyle changes. However, at seven-eight mt, edible oil production from domestic sources has remained stagnant for the past few years. As such, dependence on imports will continue until production from domestic sources is stepped up,” said B V Mehta, executive director, Solvent Extractors’ Association.
According to an India Ratings report, total edible oil production from domestic sources for 2013-14 is likely to stand at 7.6 mt, a marginal rise compared to last year’s 7.5 mt.
For the November 2013-March 2014 period, overall edible oil import fell six per cent to 4.3 mt from 4.6 mt in the year-ago period. “As the crushing of last year’s kharif oilseeds was underway in full swing, imports were suppressed. With the lean seed-crushing season, import will move up,” said Pradeep Chowdhry, managing director of Gemini Edibles & Fats India, a Hyderabad-based subsidiary of Ruchi Soya Industries.
The financials of edible oil companies are likely to improve in the coming quarters, owing to higher revenue growth on account of increased high sea sales and refinery sales. With an increase in the proportion of the higher-margin refinery sales to overall sales, the profitability and margins of companies are likely to improve significantly in 2014-15 compared to the levels seen in 2013-14 and 2012-13, India Ratings forecasts. The agency expects fully integrated refiners with wider product portfolios to benefit more than those with limited product diversification. Companies whose portfolios include branded products will see additional gains.