The import of vegetable oils fell in January by two per cent, partly due to a comfortable inventory with refining mills, show industry data.
B V Mehta, executive director of SEA, said domestic refiners had built up stocks over several months. Favourable rupee movements against the dollar and low (7.5 per cent) tariffs helped. The decline was also partly due to the ongoing crushing season. Generally, imports decline in the peak crushing season (October-March) and then start gradually picking up in the lean season.
SEA estimated 800,000 tonnes of vegetable oil was docked at various ports, while 700,000 tonnes was held with refiners, a total of 1.5 mt. The quantity was equivalent to 35 days of domestic consumption, way above the normal inventory level, which does not usually exceed 25 days.
| BALANCE SHEET Imports of vegetable oils (in tonnes) | |||
| 2008-09 | 2009-10 | Change (%) | |
| November | 555,342 | 753,966 | 36 |
| December | 745,563 | 787,423.00 | 6 |
| January | 888,102 | 872,395.00 | (-)2 |
Mehta believes imports would rise in the coming months, as the country requires over 15 mt of vegetable oils annually, of which domestic sources contribute hardly 6.5 mt. And, this year, the availability from domestic sources is expected to decline to 6 mt, due to a poor kharif oilseed crop and a “just normal” rabi crop. Imports last year were 8.5 mt; this year, it could be a record 9.5 mt.
India is the second largest importer in the world of vegetable oils (China is first), predominantly from Indonesia, Malaysia (palm oil from both), Brazil and Argentina (soya oil from the latter two). Consumption is expected to rise by four per cent this year, which would mean an additional 700,000-800,000 tonnes.
The average price of crude vegetable oil rose by 25-37 per cent in the past year. RBD palmolein shot up to $814 a tonne from $650 a tonne, while crude palm oil rose to $774 a tonne from $563 a tonne.