The Hindu Business Line : Soya oil imports down to a trickle

Chennai, Dec. 27 Import of soyabean oil (degummed) has declined to a trickle, thanks to disparity in its prices in comparison with crude palm oil and a record domestic soyabean crop.

While not a single tonne of soyabean oil was imported in November, a negligible amount has landed this month.

“Soyabean oil could have been imported in one or two parcels this month. This is because its landed cost is $150 a tonne higher than that of crude palm oil,” said Mr B.V. Mehta, Executive Director of the Solvent Extractors Association of India (SEA).

According to SEA, the landed cost of degummed soyabean oil is $1,125 (Rs 44,300) a tonne, while that of crude palm oil is $965 (Rs 38,000).

Annually, over 10 lakh tonnes (lt) of degummed soyabean oil is imported with the shipments peaking during 2004-05 oil year (November–October) at 20 lt before declining to 17 lt in 2005-06 and 13 lt last season.

In November, vegetable oil imports totalled 3.47 lt against 2.52 lt during the corresponding period a year ago. The entire imports were made up of palm group of oils.

“The fact that soyabean oil import has been reduced to a trickle is surprising since it usually picks up during winter, when people are reluctant to buy palm oil that solidifies,” Mr Mehta said.

According to SEA, it is for the first time in the last five years that no shipments of soyabean oil was received in November. The story is similar with sunflower oil, but given its landed price of $1,450 a tonne (Rs 57,150 a tonne) no importer would risk going for it.

Globally, soyabean prices have zoomed to 34-year high and soyabean oil to 33-year high this week. On Thursday, crude palm oil in Malaysia zoomed to $929 a tonne (Rs 36,600), while degummed soyabean oil was quoted at $1,229.50 a tonne in Europe (Rs 48,500).

Record crop

“What is saving consumers is higher crushing of soyabean grown in the country. With demand being high for soyameal, whose price is nearly double compared with last year, solvent extraction units are in full swing crushing the beans. That oil is now being bought,” Mr Mehta said. Domestic soyabean prices have increased to nearly Rs 20,000 and higher oil and meal prices are helping solvent units to a great extent.

On the other hand, a record soyabean crop has also come to the country’s rescue. Production this year is estimated at a record 94.6 lt against 79.6 lt last year. In fact, kharif oilseed production this year is projected at a 168.3 lt, up 34 lt over last kharif. However, rabi oilseed production could be lower than the normal 100-105 lt due to fall in rapeseed/mustard area.

One of the primary reasons for drop in import of other vegetable oils vis-À-vis palm group of oils is that the Centre, in an effort to contain inflation, reduced the customs duty on all crude oils to 40 per cent in June. That took away the nearly 20 percentage points advantage soyabean oil had enjoyed. This was in view of India’s commitment to the World Trade Organisation to bind the maximum duty on soyabean oil at 45 per cent.

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