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." |