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G. Chandrashekhar

Mumbai , Aug 5

VEGETABLE oil imports into the country continue unabated, despite Government claims of record oilseeds output in 2004-05, especially rapeseed/mustard harvested a few months ago.

According to preliminary arrival data compiled by Oilmandi.com and made available to Business Line, July imports totalled 4.3 lakh tonnes (lt), up from 3.5 lt in the previous month.

Imports last month comprised 2.18 lt of degummed soyabean oil; 1.60 lt of crude palm oil; 32,700 tonnes of crude palmolein; 16,000 tonnes of refined palmolein and the rest, crude palm kernel oil.

What the composition of India's import basket in July portends is difficult to say; but it is becoming increasingly clear that soyabean oil enjoys a higher preference.

Interestingly, perhaps for the first time, imported soyabean oil volume was more than that of the entire palm group of oils on a monthly basis. In recent months, soyabean oil has dramatically increased its market share in India.

Between November 2004 and July 2005, India's import of soyabean oil reached a new high of 12.90 lt, more than three times the volume witnessed during the same period previous year at 3.97 lt.

With July figures available, vegetable oil imports during the first nine months of the oil year 2004-05 aggregated 35.6 lt (26.9 lt).

Arrivals from August to October — peak consumption months because of festivals — are projected at not less than 16 lt, which would take the annual import total to around 52 lt (44 lt). If achieved, imports of 52 lt will set a new record, as the previous high was 51 lt in 2002-03 when the country suffered a severe drought.

These numbers cast a shadow on the crop estimates published by the government. It is unclear what agencies such as National Agricultural Cooperative Marketing Federation (NAFED) are doing with huge stocks of rapeseed/mustard procured as part of price support operation. Passage of each day means so much carrying cost.

Apparently, the policymakers have run out of ideas to effectively deploy NAFED's stocks of rapeseed/mustard to service the domestic market and reduce the volume of imports.

Considering the less-than-satisfactory status of the current Kharif oilseeds crop in India and uncertainties elsewhere — especially soyabean crop in the US — the possibility of prices coming down significantly from the present levels appears less likely on current reckoning.

August is a critical month for the US soyabean as weather can make or mar crop prospects. The redeeming feature is the healthy rise in palm oil production in Malaysia.

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