India's vegetable oils import may surge by 35 per cent to 8.5 million tonnes in the 2008-09 season, as slump in prices in the global markets coupled with zero import duty are prompting local traders to make large-scale purchase from the overseas market.
"The country is likely to purchase about 8.5 million tonnes of vegetable oils, both edible and non-edible, this oil year (November-October)," Central Organisation for Oil Trade and Industry (COOIT) President Davish Jain said.
India, the largest buyer of vegetable oils after China, imported 6.31 million tonnes in the 2007-08 season.
Jain attributed the surge in imports to falling prices in the international market. Besides, he said the duty-free regime was also helping unbridled imports.
The annual domestic consumption, too, would rise to about 13.5 million tonnes compared with over 12.5 million tonnes last year, he said.
According to the latest data by Solvent Extractors' Association (SEA), the purchase of oils in the first four months of this season, starting November, has surged by 68 per cent to 2.9 million tonnes against 1.7 million tonnes in the year-ago period. The price of crude palm oil has declined in the global markets by $264 per tonne since August last year, while that of RBD palmolein fell by $302 a tonne, according to the SEA data.
Similarly, crude soyoil has become cheaper by $503 a tonne, while the price of crude sunflower oil has dropped by $560 since August last year.
As part of its measures to control inflation, the government had in April last year scrapped import duty on crude edible oils. Later, it imposed a 20 per cent duty only on the import of crude soyoil in November 2008 while leaving the tax structure of other edible oils unchanged.
However, earlier this month, the government again scrapped the tax on the import of crude soyoil, bringing it on par with that on other crude edible oils. The move, the industry feels, will pave the way for the dumping of cheap products from overseas.
The imports surged after traders started purchasing vegetables oils on a large-scale anticipating duty on imports, which the government had indicated imposing if prices of oilseeds in the domestic market dipped below minimum support prices.
The industry had sought imposition of duty on edible oil imports, saying cheaper imports were hurting the interests of domestic farmers, who were not getting remunerative returns for their produce.
