A sharp dip in palm olein imports from Malaysia and an anticipated shortfall in domestic oilseeds output pushed up Indian edible oil prices during the past week, industry officials said on Wednesday.
"Domestic edible oil prices are constantly going up," C M Amla of Tracom Agencies, a leading New Delhi edible oil trading group, told Reuters.
"The domestic mustard crop has been damaged. Imports are also not taking place because of high international prices. As a result, reduced supplies have fuelled domestic prices."
Industry officials said India's 1997-98 (Nov-Oct) summer mustard crop was expected to fall to about 4.4 million tonne from 5.6 million in the previous season.
Importers said they were not keen to sign new edible oil import contracts as high domestic prices had reduced domestic demand to some extent.
"Export demand is low because local demand is low," said Parvez Kader, managing director of Liberty Oil Mills, a leading Bombay edible oil trading firm.
Traders and industry officials said palm olein in the domestic markets was quoted at Rs 35,200 ($891) per tonne compared with Rs 34,000 a week earlier. Groundnut oil traded at Rs 39,000 a tonne against Rs 38,100 a week earlier. Some trade officials said the rupee's depreciation had also hit the country's edible oil imports in the first four months of the 1997-98 season.
"A fall in the rupee value, crop reports and high global prices -- all have taken their toll on our edible oil imports," said B V Mehta, executive director of the Solvent Extractors' Association of India.
Traders said India imported 305,000 tonnes of edible oil between November 1997 and February 1998 compared with 460,000 tonne in the same period a year earlier.
The rupee has lost some 9.5 percent percent since August 1997. On Wednesday, it was quoted at Rs 39.50 against the US dollar.
Trade officials said Indian domestic edible oil prices were expected to remain firm in the near future as a ban on crude palm oil exports by Indonesia was continuing, making Malaysia the only supplier.
"There are only rumours that the ban by Indonesia will be lifted soon," Kader said. "But until then, prices will remain firm -- both international and domestic." (Reuters)
Indonesia has indefinitely banned crude palm oil exports to boost supplies and check its domestic prices from rising.
Trade officials said summer oilseed crop arrivals, which had started trickling in, were expected to be in full flow from the second week of April.
"That can help to check the domestic price rise to some extent," Amla said.
