 "India’s edible oil import bill to rise 25% in FY 16-17")
The country's edible oil import bill is likely to jump in 2016-17, due to rising prices and a burgeoning supply deficit from local sources.
This import has risen 50 per cent over four years. In the past 13 years, output from domestic sources has moved in a narrow range of 5.5–7.25 million tonnes (mt), due to both negligible technological innovation and its use. Import (both crude and refined) of oil has quadrupled in this period, on consistent rise in demand from both rural and urban India.
“There is continuous rise in demand, with stagnant domestic output. The way prices have reversed over the past thee months, we might see at least a 25 per cent rise in the import bill during the next financial year,” said Atul Chaturvedi, chief executive officer at Adani Enterprises which produces the Fortune brand in many variants.
India imported 14.4 mt (crude and refined) during the oil year (November 2014–October 2015), worth around $10 billion. At an estimated 800,000 tonne increase in monthly import, the industry estimates 15.5 mt of import in the current oil year. The bill in 2015-16 might cross $11.5-12 bn and to $14.5-15 bn in 2016-17.
“The import bill for 2016-17 will be much higher than 2015-16. The government is still dallying on GM (genetically modified) oilseeds while our problems are escalating,” said Dorab Mistry, Director, Godrej International. Benchmark crude palm oil (CPO) prices have reversed after a seven-year low of 1,800 ringgit (Rt) in August 2015. Since then, CPO has seen a 50 per cent jump in price, to trade currently at 2,600 Rt a tonne. The price is up 25 per cent since January. Mistry says it will soon touch 2,700 Rt. He wants use of genetically modified seeds to increase domestic production.
Malaysia and Indonesia, the world’s two top producers, have stated taking measures to control an earlier supply surplus. According to trade sources, Malaysia has imposed an export tax on crude oil to promote shipment of refined oil and encourage investment in the country’s refining activities. And, the government here recently raised the basic customs duty on all refined edible oils from 15 to 20 per cent, and on crude oils from 7.5 to 12.5 per cent.This import has risen 50 per cent over four years. In the past 13 years, output from domestic sources has moved in a narrow range of 5.5–7.25 million tonnes (mt), due to both negligible technological innovation and its use. Import (both crude and refined) of oil has quadrupled in this period, on consistent rise in demand from both rural and urban India.
“There is continuous rise in demand, with stagnant domestic output. The way prices have reversed over the past thee months, we might see at least a 25 per cent rise in the import bill during the next financial year,” said Atul Chaturvedi, chief executive officer at Adani Enterprises which produces the Fortune brand in many variants.
India imported 14.4 mt (crude and refined) during the oil year (November 2014–October 2015), worth around $10 billion. At an estimated 800,000 tonne increase in monthly import, the industry estimates 15.5 mt of import in the current oil year. The bill in 2015-16 might cross $11.5-12 bn and to $14.5-15 bn in 2016-17.
“The import bill for 2016-17 will be much higher than 2015-16. The government is still dallying on GM (genetically modified) oilseeds while our problems are escalating,” said Dorab Mistry, Director, Godrej International. Benchmark crude palm oil (CPO) prices have reversed after a seven-year low of 1,800 ringgit (Rt) in August 2015. Since then, CPO has seen a 50 per cent jump in price, to trade currently at 2,600 Rt a tonne. The price is up 25 per cent since January. Mistry says it will soon touch 2,700 Rt. He wants use of genetically modified seeds to increase domestic production.
According to trade sources, Malaysia has imposed export tax on crude oil to promote shipment of refined oil and encourage investment in the country’s refining activities. Hence, India’s import bill will rise proportionate to the rise in prices of refined edible oil in Malaysia and Indonesia.
