Vegetable oil imports set a new record in the last oil year (November-October) on increased consumer and institutional domestic demand. Disparity in domestic seed crushing led to poor capacity utilisation and accumulation of stock through imports in the beginning of the season.
Though the surge was a minimal seven per cent at 9.24 million tonnes (worth Rs 38,000 crore) in the last oil year (November 2009-October 2010) from 8.66 million tonnes in the previous year, yet the quantity of vegetable oil was at an all-time high since imports started in 1994, data compiled by the Mumbai-based trade body the Solvent Extractors’ Association of India (SEA) showed.
During October, however, total imports intensified amid apprehensions that crude palm oil prices would rise due to low output in key producing countries including Malaysia and Indonesia.
Imports during the month rose 25 per cent to 832,699 tonnes as compared to 667,276 tonnes in the same month last year.
In September, however, imports were up only a meager six per cent to 960,752 tonnes from 905,192 tonnes in the same month last year. Depreciation of the dollar against the rupee also made imports lucrative.
B V Mehta, executive director of SEA, attributed the record import of vegetable oil to high price elasticity as low price boosted co nsumption oils like palmolein.
Also, zero import duty on crude edible oil and very nominal (7.5 per cent) duty on refined palmolein favoured the import over domestic oils at the expense of Indian oilseeds farmers and crushers. Rising domestic demand also got support from government schemes like mid-day meals, subsidised oil and NRGEA.
During the season, the profit margin of oilseeds processors deteriorated severely. Many plants were operating at much lower capacity to minimise the losses, resulting in higher imports during the first quarter of the oil year. Owing to disparity, in first quarter (November–January) imports were higher, while in last quarter (August-October) imports jumped 29 per cent over the previous year, due to festival demand.
Total imports of edible oil during November 2009-October 2010 were at 8.82 million tonnes as compared to 8.18 million tonnes last year and 4.42 million tonnes in 2005-06, doubled in five years.
In contrast, arrival of non-edible oils in the country declined nine per cent to 418,068 tonnes last year as compared to 459,599 tonnes during the same period of previous year.
Current stock of edible oils as on November 1 at various ports was estimated at 670,000 tonnes (CPO 400,000 tonnes, RBD palmolein 60,000 tonnes, degummed soybean oil 140,000 tonnes and crude sunflowerseed oil 70,000 tonnes) and about 780,000 tonnes in pipelines. Total stock, both at ports and pipelines, was estimated at 1.45 million tonnes as compared to 1.5 million tonnes a month ago.
