The country’s dependence on global edible oil market is likely to rise 20 per cent this year due to lower domestic output and rising consumption following a drastic price slump.
During 2007-08 oil year (November-October), the country met 46 per cent, or 6.2 million tonnes of its estimated consumption of 13.5 million tonnes, through imports. Poor domestic market performance restricted the supply to 54 per cent or 7.3 million tonnes.
The year 2008-09 has been another bad year for oilseed crops, resulting in estimated oil output of 6.6 million tonnes. On the other hand, consumers’ overwhelming response to lower global prices may raise the domestic consumption to a little over 15 million tonnes this oil year. Consequently, imports are likely to increase to 8.5 million tonnes, thereby leading to an import reliance of over 56 per cent.
| The Break-up Import dynamics (November - October) in '000 tonnes | |||
| 2008-09 | 2007-08 | 2006-07 | |
| Soya oil | 1,000 | 750 | 1,335 |
| Palm | 6,750 | 5,270 | 3,665 |
| Sun oil | 500 | 30 | 200 |
| Lauric oils | 200 | 200 | 200 |
| Vanaspati | 50 | 50 | 215 |
| Total | 8,500 | 6,300 | 5,615 |
According to DN Pathak, Director of Central Organisation for Oil Industry & Trade (COOIT), the kharif crop will depend mainly on spread and time of monsoon rains. The output of soybean, the major crop in the kharif oilseed season, would be bumper only when rains were evenly distributed throughout the growing area, Pathak said.
He added farmers were awaiting rains for sowing soy seeds. There was great enthusiasm among farmers for the next season’s soybean crop, he said.
Meanwhile, a recent paper presented by Dorab Mistry, director of Godrej International, estimated that India’s per capita consumption of edible oil will increase by 12 per cent to 12.78 kg this year from 11.40 kg last year.
Meanwhile, Indian importers have already stocked the required quantity of edible oil (both crude and refined) apprehending that the government of Indonesia and the recently-elected government in New Delhi may levy export and import taxes.
If these taxes are imposed, the price of the commodity will increase more than the levy, said an analyst.
The Indonesian government has proposed 3 per cent export duty on crude palm oil, which India imports in enormous quantities. Indonesia had scrapped a 7.5 per cent tax last November after prices tumbled amid the global recession. Apprehensions are that India may levy an import duty of 10-20 per cent soon in order to raise direct tax collections.
In Rotterdam, palm oil has surged 43 per cent this year after falling 46 per cent in 2008 on expectation that the demand may rise on signs of recovery in the global economy. The new levy in Indonesia was based on an average price in Rotterdam of $774.93 a tonne between April 20 and May 19.
India’s imports of vegetable oil (edible and non-edible) increased 59 per cent to 3.6 million tonnes in the five-month period ending March 2009 as compared to 2.3 million tonnes in the corresponding period last year.
During the period, refined soyoil fell marginally to Rs 450 from Rs 463 per 10 kg while refined sunflower oil and groundnut oil slipped to Rs 475 per 10 kg and Rs 558 per 10 kg from Rs 640 per 10 kg and Rs 610 per 10 kg, respectively. In contrast, prices of RBD palmolein jumped to Rs 410 per 10 kg from Rs 328 per 10 kg.
