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"Demand for vegetable oil will continue to remain firm."

Mumbai , Sept 22

THE country's edible oil imports are expected to be largely unchanged in the region of 52-55 lakh tonnes despite the fact that domestic vegetable oil production during the 2003-04 (November-October) season is expected to be considerably higher on account of good monsoon rains, Mr Thomas Mielke, Editor, Oil World, said.

According to Mr. Mielke, demand for vegetable oil would continued to remain firm, especially in a year when monsoon rains have been good and rural incomes are seen improving.

He estimates imports of 38.5 lakh tonnes of palm oil, 13.5 lakh tonnes of soya oil and 1.8 lakh tonnes of sunflower seed oil. Production of oils and fats is estimated at around 74 lakh tonnes in the 2003-04 season, higher by 12 lakh tonnes production of the previous year. "However, the question how much this can remove from the import bill is subject to a number of variables which are difficult to predict at this time,'' he said.

According to him, during the 2002-03 season per capita consumption fell to 11.2 kg as against 11.7 kg in the preceding two seasons, despite high domestic prices. "The stronger performance of the agricultural sector should support income growth and strengthen demand,'' he said.

Mr Mielke believes that domestic vegetable oil prices are likely to come under pressure when growing volumes of domestically produced oils enter the market. "This may encourage the Indian Government to raise import tariffs which will limit the downward potential for domestic prices considering the current firm trend in world market prices,'' he said.

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