The Hindu Business Line : Vegoil imports rise 30% in Nov on lower global prices

Chennai, Dec. 15 Vegetable oil imports increased 30 per cent in November compared with the same period a year ago, as prices in the global market continued to decline. However, a feature of the import scenario was that not a single tonne of either degummed (crude) soyabean oil or refined soyabean oil was imported during the month.

Even last year, soyabean oil imports were nil in November but there is a difference in the situation then and now.

Customs duty

Last year, soyabean oil imports dropped as prices had sky-rocketed and freight rates, too, were high. But this year, imports have been affected due to the landed cost difference between crude palm oil and soyabean oil increasing to over $440 a tonne from $350 a tonne.

“This is due to imposition of 20 per cent Customs duty on soyabean oil from November 18. This has made import of soyabean oil even less attractive,” said a statement from the Solvent Extractors Association of India.

During the previous oil year (November 2007-October 2008), soyabean oil imports had declined to 7.59 lakh tonnes from over 13 lakh tonnes in 2006-07 due to factors such as high global prices and farmers’ strike in Argentina against export tax.

“Soyabean oil imports are likely to be lower during the current (oil) year,” the association said.

During November, vegetable oil imports, including for non-edible purpose, totalled 5.55 lakh tonnes against 5.19 lakh tonnes during the same period a year ago.

Refined oils up

“Share of refined oils has increased to 27 per cent from 25 per cent during the review period,” said the association. This is in view of refined oils duty remaining at 7.5 per cent and making it feasible for their import.

The Solvent Extractors Association also attributed the rise in imports to the bearish trend in the global market. Since September 15, prices of vegetable oils have declined between $370 and $200 a tonne. For example, crude palm oil which was ruling at $700 a tonne on September 15 has currently declined to $490 a tonne.

The drop in global vegetable oil prices is seen encouraging their imports and the edible oil sector is of the view that imports could hit a record 60 lakh tonnes this season, including for non-edible purpose. This is against a record 56.08 lakh tonnes last season.

This season’s imports are also seen up as the kharif oilseed crop has been projected lower compared with last year. According to trade estimates, oilseeds production during the kharif season has been pegged at 266.1 lakh tonnes against 270.6 lakh tonnes last season. This is in view of a projected fall in groundnut and sunflower production, despite hopes of a record soyabean crop.

Edible oil imports have been rising consistently during the last few years in view of Indian middle class’ rising purchase power, while domestic production has been unable to meet the growing demand.

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