Rising demand, low tariffs and a declining dollar helped the trend.
The earlier growth in vegetable oil imports has gradually slowed, turning negative in October, due to the beginning of crushing in local mills from the season’s harvested domestic seeds. However, the domestic industry fears the succeeding quarters could see a similar trend.
According to data compiled by the Solvent Extractors’ Association (SEA), vegetable oil imports in the first quarter of the oil year (November-October) jumped 76 per cent. It gradually slumped to five per cent of growth in the last quarter of the year. In October, the last month of the year, imports plunged 19 per cent to 667,276 tonnes, as compared to 826,848 tonnes in the corresponding month last year.
Total import of vegetable oil during oil year 2008-09 jumped, however, by 37 per cent to 8.66 million tonnes (MT), worth Rs 28,000 crore, from 6.31 MT valued at Rs 25,000 crore during the same period last year.
“Imports remained at over two MT during all four quarters of the last year and the trend is likely to continue this year as well, due to rising domestic consumption and zero import duty on crude edible oil and very nominal duty on refined palmolein that have favoured the import over domestic oils at the expenses of Indian oilseed producers and crushers,” said B V Mehta, executive director of SEA. The figure set a new record since import opened in 1994.
“Generally, import during the first half of the oil year declines due to large availability of edible oil from domestic crushing mills. But, even during peak harvesting of oilseeds, crushing was poor, as farmers, in anticipation of higher prices, held their stocks for the future. This is the most worrying factor for the domestic edible oil industry,” said Mehta.
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Meanwhile, five per cent depreciation of the dollar against the rupee has also made import cheaper.
The import of edible oils is up by 46 per cent as compared to the previous year, of which crude palm oil arrivals increased to 5.19 million tonnes from 4.04 MT. Imports of RBD palmolein jumped to 1.24 MT from 731,000 tonnes in the previous year, while that of palm products, including CPO and RBD palmolein, surged to 6.53 MT from 4.81 MT last year. Soybean oil import increased to 990,000 tonnes from 759,000 tonnes. Sunflower oil import jumped to 590,000 tonnes from 27,000 tonnes. And, rapeseed oil import was reported at 46,000 tonnes after a gap of five years.
In view of nil import duty on CPO and 7.5 per cent on RBD palmolein (effective duty is only 4 to 5 per cent), palm oil products’ import from November 2008 to October 2009 has, as noted earlier, further increased to 6.53 MT compared to 4.81 MT last year.