Edible oil imports may hit all-time high

Industry estimates of edible oil imports for the oil year 2004-05 (November-October) may be upwardly revised to an all-time high of 52 lakh tonne, said Sandeep Bajoria, president of The Central Organisation of Oil Industry and Trade. This will be a 18 per cent rise.

Earlier estimate, issued in March, had pegged the import at around 50 lakh tonne, a rise of 13.6% from about 44 lakh tonne last year.

According to industry sources, estimated July imports are around 5 lakh tonne with 3 lakh tonne palm oil and the remaining soft oils, largely soyoil.

The edible oil imports in the November-June period this fiscal has been around 30.6 lakh tonne, as per the data provided by the Solvent Extractors' Association of India. Last year, during the August-October period imports were 17 lakh tonne. Even if this figure remains same this year, the total imports may touch 52 lakh tonne, an industry expert said.

"The rise is likely to come following lower international prices, which may push more soyoil into the country. The soybean crop matures in January but the high domestic prices compared with lower international prices leads to a preference for the latter," said B.V. Mehta, executive director, SEA.

Industry and traders now blame the refusal of the National Agricultural Cooperative Marketing Federation of India to offload its mustard stock at lower rates for allowing huge imports.

Nafed had procured mustard at an all-time high of 20.9 lakh tonne at the minimum support price of Rs 1,700 per 100 kg in FY05-06. The procurement, which was done in the April-June period, was made under price support scheme under Union government. Government had initiated procurement of mustard in a bid to support prices following a bumper crop.

"We have bought mustard at Rs 1,700 per 100 kg and after the carryover costs, our cost price will be atleast around Rs 1,870. Thus, it will be difficult for us to sell below Rs 1,700.," said Alok Ranjan, Nafed's managing director.

Ranjan is sure that festival season will create demand.

Industry, however, has a different take. "This year, there is a glut situation globally leading to prices of all edible oils being down by Rs 6-7 per kg. In such a scenario how can Nafed adopt such a position and not offload it stock at prevailing market price of around Rs 1,600-1,630 per 100 kg," said D.P. Khandelia, SEA president.

Though India's imports largely constitute of palm oil and soyoil and miniscule quantities of mustard oil, the interchangability of the oils in consumption pattern has pulled down demand for mustard oil this year.

Khandelia adds, "With Nafed unwilling to sell the seed, almost 75 per cent of the processing mills are lying idle this season."

A section of the industry, however, begs to differ. "Nafed's decision is good as it has helped the market to improve. I believe they should not be in a hurry to offload even now as soybean crop across the world , in US, China and India, will be harvested down a month or so," said Dorab Mistry, director with London-based Godrej International and an acclaimed industry analyst.

Ministry pegs his optimism on the "possibility that in year 2006, the growth in edible oil demand will not be fulfiled by supply. The market has to go up then and Nafed will be able to get good returns."

Crude development

Industry and traders blame the refusal of the National Agricultural Cooperative Marketing Federation of India to offload its mustard stock at lower rates for allowing huge imports

According to industry sources, July imports are estimated around 5 lakh tonne

Edible oil imports in November-June this fiscal was around 30.6 lakh tonne

Last year, during the August-October period imports were 17 lakh tonne