Massive stock-building by processors, refiners and stockists led to the rise.
India’s vegetable oil imports set a record in August on massive stock-building by processors, refiners and stockists in anticipation of higher demand this festive season.
Data compiled by the apex trade body, the Solvent Extractors’ Association (SEA), show that vegetable oil imports rose 64 per cent to 10,65,641 tonnes in August this year as compared to 650,603 tonnes in the corresponding month of the previous year. Total edible and non-edible oil imports were 10,00,942 tonnes and 64,699 tonnes, respectively, as compared to 6,12,898 tonnes and 37,705 tonnes, respectively, in the same period last year. In the first 10 months of the oil year (November 2009 to October 2010), vegetable oil imports recorded a marginal rise of five per cent to 74,47,955 tonnes as compared to 70,70,491 tonnes in the corresponding period of the previous year.
“Due to uncertainty over the global economic outlook, buyers deferred imports. As prices have gradually started firming up and pundits continue to forecast a rise, traders have started booking fresh orders to meet the coming festival and seasonal demand. Also, pipeline inventory has declined drastically in the last couple of months. This is pushing imports,” said B V Mehta, executive director, SEA.
Mehta said there had also been a sudden rise in per capita consumption of edible oils in the country due to rising disposable incomes and low prices.
“The first thing that comes to mind is a change in food habits by adding more oily and tasty stuff frequently. Eating outside has also become common, resulting in the per capita consumption rising to 13.5 kg this year as against 11.5 kg a couple of years ago,” Mehta added.
As a consequence of higher imports, pipeline inventory has increased by 1.65 lakh tonnes in the last one month. According to an estimate, the inventory of vegetable oils, both at ports and in pipelines, is estimated at 13,80,000 tonnes as on September 1, as compared to 12,15,000 tonnes about a month ago. The current stock of edible oils at various ports is estimated at 680,000 tonnes (crude palm oil 300,000 tonnes, RBD palmolein 60,000 tonnes, degummed soybean oil 260,000 tonnes and crude sunflowerseed oil 60,000 tonnes). The pipeline inventory is about 700,000 tonnes.
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In the oil year ending October 2010, vegetable oil imports are estimated to surpass nine million tonnes as against 8.6 million tonnes in the previous year.
Between November 2009 and August 2010, RBD palmolein imports were at 987,959 tonnes as compared to 10,05,595 tonnes in the same period last year. The share of refined oil remained 14 per cent and that of crude oil at 86 per cent. The benchmark groundnut oil prices rose by more than Rs 100 per tin (of 15 kg) last week due to scarcity of groundnut in Gujarat.
Some industry players believe that the price rise is because of speculation as there is not much demand. A 15-kg tin of groundnut oil in Rajkot is now available at an all-time high of Rs 1,570-1,575. While packaged 15-litre groundnut oil tin is priced at Rs 1,470-1,475, the groundnut oil sold at retail stores is priced at Rs 955-960 per 10 kg.