Veg oil imports double in May

India’s vegetable oil imports doubled in May on huge stockpiling by local players in anticipation of higher prices in global markets.

According to data compiled by the Solvent Extractors’ Association (SEA), the Mumbai-based leading industry body, total vegetable oil imports jumped to 751,000 tonnes in May this year as compared to 362,000 tonnes in the same month last year.

During the seven-month period ended May 2009, total arrivals of vegetable oil from overseas, recorded a rise of 70 per cent to 5.04 million tonnes from 2.97 million tonnes in the previous year’s same period.

The huge spurt in arrivals has strengthen, however, the industry’s demand of up to 37.5 per cent import duty levy in the forthcoming Budget. Cheap imports of vegetable oil have hurt domestic oilseed growers to divert to more remunerative crops including sugar and cotton. The levy of import duty will raise prices in the local market which will translate into higher return to oilseed farmers thereupon, raising potential of additional acreage area under oilseeds, a trade source said.

If the current trend continues, India’s edible oil imports may rise 12.7 per cent this oil year (November-October) to 8 million tonnes as against 7.15 million tonnes in the previous year.

“Instead of raising our import bill of vegetable oil, we should encourage our own farmers by incentivising them to grow more seed and thus, reducing dependence on imports” said BV Mehta, executive director of SEA. India’s vegetable oil bill surged to Rs 24,000 crore last year which is set to stabilise at Rs 20,000 crore this year on price fall.