The Hindu Business Line : Slowdown in vegoil import

DECEMBER witnessed considerable slowdown in vegetable oil imports for various reasons including pressure of domestic arrivals, price disparity and sluggish offtake.

Imported oil arrivals aggregated 2.27 lakh tonne last month, down from 3.27 l.t. in the previous month and 3.06 l.t. registered during December 2004.

According to the industry portal Oilmandi.com, December imports comprised in the main 1.24 l.t. of crude palm oil; 76,750 tonne of crude soyabean oil; and 12,500 tonne of crude palmolein.

There was also import of 7,000 tonne crude palm kernel oil and 5,500 tonne of refined palmolein, the rest being crude sunflower oil.

It is not unusual to see a slowdown in imports during the peak marketing and crushing season here. In addition, the State agency, National Agricultural Cooperative Marketing Federation (Nafed) is holding large stocks estimated to be over 15 l.t. of rapeseed/mustard procured during the last rabi harvest.

The condition of next crop looks satisfactory, both within the country and around the world. Supplies are abundant. Palm oil production will get into a lean period in the first quarter of 2006, which can impart an upward thrust to the market; but any upward momentum will be contained by large stocks at the origin.

The domestic solvent extraction industry is upset that Nafed is attempting to liquidate its inventory in the export market rather than domestically and believes that the attempt would not meet with success. Whether the Government has a transparent policy on this issue is unclear.

Not only this , there are several other aspects of the oilseeds and vegetable oil sector that need urgent Government attention, not the least of which is the inverted duty structure for vanaspati and crude palm oil imports.

Interestingly, the sugar sector which is only a third of the size of the country's oilseeds and vegoil sector is able to obtain a lot of Government attention and support. Policymakers are indifferent to the woes of the vegoil sector which are not confined to trade or fiscal policies.

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