The Hindu Business Line : Vegoil imports hit record in Oct on falling prices

Chennai, Nov. 14 A record 8.27 lakh tonnes (lt) of vegetable oils were imported during October, thanks to sharp fall in the prices in the global markets and a favourable duty structure. This was against 7.87 lt imported during the same period last year.

In view of the higher imports, total vegetable oils import during 2007-08 season that ended in October was a record 63.1 lt against 55.9 lt last season.

Initial imports

According to the Solvent Extractors Association of India, the imports were the highest since vegetable oil shipments were allowed in the country in 1994. When imports opened up, it was a meagre 8.27 lt with edible oils shipment being 7.87 lt.

“October witnessed a record import following lean crushing season coupled with the lowest price in the international market in the last two years; and in anticipation of increase in import duty on edible oils as importers rushed for cover,” the association said in its release.

Inflation surge

In the first two quarters of the oil season 2007-08, imports were up 41 per cent and 37 per cent compared with the previous year. But in the last two quarters, the shipments were up 59 per cent and 63 per cent respectively. “This was mainly due to reduction in Customs duty by the Centre in April in the wake of rise in prices in international market,” the association said.

Surge in the rate of inflation figures, which touched the double digit mark, also forced the Centre to cut Customs duty before the global markets, including vegetable oil, witnessed a crash in prices of commodities on credit woes and fears of economic slowdown. A fall in crude oil prices, which have dropped below $55 a barrel after touching a record $147 in July, has also contributed to the crash in vegetable oil prices.

In view of Customs duty on refined oil being reduced to 7.5 per cent, imports of refined, bleached and deodorised (RBD) palmolien increased to 7.3 lt from 1.15 lt last year. Crude palm oil imports, too, witnessed an increase to 40.44 lt from 29.94 lt. In view of higher prices, refined soyabean oil imports were nil, while degummed soyabean oil shipments in the country slid to 7.59 lt from 13.22 lt. This was due to two reasons. One, freight rates during most part of the season were higher, making imports from South America unviable and two, farmers in Argentina went on a strike affecting exports and in turn, forcing prices of soya products higher.

Sunflower oil imports were down at 26,940 tonnes against 1.95 lt with the entire amount entering the country only during September and October.

Seen rising further

For the current season, the Solvent Extractors Association expects vegetable oil imports to rise to 65.67 lt. “Considering current kharif oilseeds crop at 165 lt and presuming normal rabi crop of 100 lt, domestic oil availability will be lesser than (demand created by) incremental growth,” the association said.

Related Stories:
Imports may cap rise in edible oil prices
Veg oil imports turn cheaper as prices fall

More Stories on : Oilseeds & Edible Oil | Exports & Imports

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