After two months of continuous surge in the current season, India's cooking oil imports declined by about 29,000 tonnes in January 2010, which experts say was due to huge inventory built up here over the past one year.
Edible oil imports declined to 8.27 lakh tonnes in January this year from 8.56 lakh tonnes in the same period in 2009, according to data released by Mumbai-based Solvent Extractors Association (SEA) today.
However, import of non-edible oils, used in making of soaps and others, has gone up by about 14,000 tonnes, it said.
"Last season, the importers had continuously bought cooking oils from Indonesia and Malaysia as global prices were down, taking the country's total imports to a record 81.83 lakh tonnes," an industry expert said.
The high level of import helped to build up a comfortable inventory here, he said, adding that the requirement for 2008 -09 was estimated at 130-140 lakh tonnes, out of which an estimated 70-75 lakh tonnes of oils was produced domestically.
In 2008-09 oil year (November-October), the import of vegetable oils, both edible and non-edible, was higher in every month except October. However in November and December 2009, the imports again started rising giving an impression that the downfall was arrested.
The decline in import during last month showed that the domestic edible oil manufacturers have gone slow in bringing the oils to the country after they realised that the zero-duty regime is not going to be changed, the expert said.
The government in 2008 allowed import of crude vegetable oil at zero duty and reduced the levy to just 7.5 per cent from a level of 40-50 per cent on refined oils.
However, with food inflation still at about 18 per cent level, the government has not imposed customs duty on imported oils as any move to levy duty would have led to rise in prices.
SEA said that the import of vegetable oils, both edible and non-edible, stood at 8.72 lakh tonnes for January 2010, compared to 8.88 lakh tonnes in the year-ago period.
While crude oils have a share of 84 per cent, the remaining 16 per cent was of refined oils in the January import basket of cooking oils, the industry body said.
The non-edible oils import has increased to 45,213 tonnes from 31,412 tonnes in the review period.
For the first quarter of 2009-10 season, the vegetable oil import recorded a rise of 10 per cent at 24.13 lakh tonnes from 21.89 lakh tonnes in the corresponding quarter of previous year.
India imports palm group of oils from Indonesia and Malaysia, while soya bean and sunflower oil are sourced from Argentina and Brazil.
