Veg oil imports up 35% in December

Imports were reported at 900,000 tonnes against 660,000 tonnes during the year-ago period

Import of vegetable oils in December went up 35 per cent compared with the corresponding month last year due to heavy imports after Malaysia reduced export duty on such oils.

The December imports are reported at 900,000 tonnes against 660,000 tonnes during the year-ago period, according to data released by the Solvent Extractors' Association of India (SEA). Out of the total vegetable oil imports, 870,000 tonnes were edible oils and 25,098 tonnes were non-edible oils.

“With Malaysia and Indonesia having excess of stocks, they are dumping it in India, which will cause India's vegetable oil imports to hit a new high this year,” said B V Mehta, executive director of SEA.

Although vegetable oil imports are on the rise every year, it is usually lower during this time of the year. However, there has been a reversal in the trend this year. Domestic crushing units do not find parity in processing locally originated seeds, while traders are largely banking on cheap crude palm oil from Malaysia and Indonesia. Crushing of soybean and mustard have been impacted due to lower export demand for meal, which in turn has also affected the production of vegetable oils.

Indonesian crude palm oil production is estimated to be around 27 million tonnes (mt) in 2012 compared with 23 mt in the previous year. Malaysia's crude palm oil production is estimated to be around 18.9 mt, according to data by Malaysian Palm Oil Board. Since these two countries are over-stocked with crude palm oil, they are shipping maximum quantity to India.

Last year, India's vegetable oil imports were at a record high of 10.2 mt (November 2011–October 2012) and this year, it is expected to be higher by around half a million tonne. The price of soft oils are also higher at $350 per tonne, while palm oil is priced cheaper at $300, thus causing palm oil imports to increase.

SEA has taken up the issue with the government and strongly pleaded to impose an import duty of 10 per cent on CPO and 20 per cent on RBD palmolein and RBD palm oil. India's total rabi oil seed acreage is estimated to be around 8.41 million hectare, up 3 per cent compared with last year, according to data released by the ministry of agriculture.

The acreage of mustard seed, the main rabi oilseed, is estimated to be around 6.69 million ha, up 3.5 per cent compared to last year. The target set by the agriculture ministry is 33.5 mt against 30 mt which was produced during 2011-12.