Vegetable oil imports to rise to 15 mn tonnes next year

Amid bearish price outlook, India's vegetable oil import is likely to surpass 15 million tonnes to set a new record in the oil year 2015-16 (November - October), experts forecast at a conference here on Tuesday.

Total vegetable oil import into India is estimated at 14.1 million tonnes in the oil year 2014-15, a rise of 21% from 11.7% from the previous year, data compiled by the Solvent Extractors' Association (SEA) showed. In fact, import of vegetable oil surpassed the level of full last year's level in the first 10 months betwen November - August this year.

"India would seek additional import of veg oil of 1.5 - 2 million tonnes next year on lower production here to meet its rising local demand", said James Fry, Chairman, LMC International, an Oxford-based commodity trading company.

India has been the world's largest importer of vegetable oil for the last several years as its production from local sources continued to remain stagnant at around 7 million tonnes. Thus, around 70% of India's total vegetable oil consumption is met through imports.

Echoing similar response, B V Mehta, Executive Director of SEA, said, "Lower price has resulted into dumping of over 2.4 million tonnes of additional veg oil. So, such a massive increment of 1.5-2 million tonnes in import may not be possible. But, we are confident that India will be able to achieve 15 million tonnes of import next year.

Indian importers take a rampant shift in import of veg oil. While crude palm oil (CPO) is imported from Malaysia and Indonesia, refined soya oil arrives from Argentina.

There are reports of crop failure and lower productivity thereupon in the ensuing kharif harvesting season and the last rabi season. So, oilseed production in India is expected to get a hit resulting into lower output of veg oil from local sources.

Atul Chaturvedi, Chief Executive Officer of Adani Wilmar Ltd which produces Fortune brand edible oil, called for urgent need to raise import duty to make differentials between crude and refined oil at 15%. The government on September 18 raised import duty by 5% to 12.5% on crude and 20% on refined oil. Despite increase in import duty, the differential continued to remain unchanged at 7.5% which is insufficient to protect Indian from dumping.

Meanwhile, Thomas Mielke, a global analyst, forecast India's oilmeal exports to remain subdued due to lower crushing parity of oilseeds and thereby, lower production and rising consumption from local sources. Oilmeals are largely used as cattlefeed.