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Pile-up of edible oil stocks not a concern

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Ruchi AhujaNevin John Mumbai
Huge edible oil stocks lying at various ports need not be a matter of concern to Indian market, said Dorab Mistry, director of London-based Godrej International.
 
Edible oil stocks since May have been around 4-5 lakh tonne, thereby creating concern and liquidity crunch among small players.
 
Speaking at the annual general meeting of the Solvent Extractors Association of India, Mistry said, "India has an annual consumption of about 12 million tonne, of which about 4.5-5 million tonne is met through imports. Thus, it should not be a matter of concern, if at any point of time, there is a month's stock - i.e. 1.2 million tonne - in the pipeline."
 
India's imports in oil year 2004-05 (i.e. November-October this year) is likely to be around 5.2 million tonne as against 4.4 million tonne last year. "In 2004-05, till date, imports are already around 4.3-4.4 million tonne," industry sources said.
 
India's imports next oil year (i.e. 2005-06) are likely to be the same as this year, but Mistry refused to elaborate on that at the moment.
 
"Overall, it is all about internationalising of the market. The idea of unpriced consignments should be acceptable now."
 
Unpriced consignments are those, which are brought unsold to the destination. These are priced and traded, when unbondaged, at the spot price.
 
Mistry said, "The trend is leading to evolution of a mature market. The import trade pattern in India in the July-September period this year has clearly gone against local importers. This is likely to lead to a shake-out in the market and thereby, towards the survival of the fittest."
 
He feels India must encourage palm oil plantations, following a growing need for the oil in the country .
 
While this year imports of soft oils versus palm oils are seeing a rise, with the former eating into the kitty of the latter, the latter still reigns supreme owing to lower prices.
 
However, even the price benefit is reducing fast, as the difference between crude palm oil prices and soyoil (the latter being the expensive one) prices is down to $65/tonne compared to $100 tonne in January this year.
 
With regard to huge mustard stocks - of about 2 million tonne - with the National Agricultural Cooperative Marketing Federation of India, Mistry said, "I would advise them to wait till January to sell the stocks."

 
 

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First Published: Sep 26 2005 | 12:00 AM IST

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