The Hindu Business Line : Edible oil imports rise; oilseed prices rule firm

EDIBLE oil imports into the country during October were an estimated 4.26 lakh tonnes (lt), according to data made available to Business Line by Oilmandi.com, a vegetable oil industry portal.

Imports broadly comprised 2.35 lt crude palm oil; 1.12 lt refined palmolein; 36,700 tonnes crude palmolein; and 25,300 tonnes crude soyabean oil. The rest was accounted for by crude palm kernel oil (9,700 tonnes) and crude sunflowerseed oil (7,500 tonnes).

With this, edible oil imports during the oil year 2002-03 (November/October) reached a new high of 51.54 lt, up from 44.25 lt during 2001-02. Palm group of oils dominated the import basket with 38.5 lt, accounting for close to 75 per cent of total imports.

Higher imports were necessitated by a sharp reduction in domestic vegetable oil production as indigenous oilseeds output suffered a setback because of drought.

Meanwhile, domestic edible oil market continues to rule firm. Groundnut oil ready was quoted at the Mumbai wholesale market on Saturday at Rs 46,700 a tonne. The pressure of inflow of indigenous oils is yet to be felt. In addition, the local market has taken a cue from the firm trend in international market.

Even the report of a bumper crop of soyabean— estimated by Agriculture Ministry at 71 lt— has not had much impact on local bean prices. In Madhya Pradesh, bean market is on the boil at over Rs 13,000 a tonne, 30 per cent above the minimum support price.

Similarly, in Gujarat, despite an unusually large crop, groundnut in-shell at the marketing yards is quoted at Rs 320-350 per 20 kg lot, that is in the range of Rs 16,000-17,500 a tonne.

Oilseed growers had not obtained such high prices in the past several years.

Contrary to past practice, many farmers are unwilling to unload the harvested produce on a large scale and are inclined to space their sales well. Big farmers, especially in Madhya Pradesh, have the holding power.

In 2003-04, world major oilseed output is forecast to rise by around 18 million tonnes (mt) to reach a new record of 347 mt. This will result in a 6 mt expansion in global vegetable oil production to around 101 mt.

Interestingly, contrary to prognoses and forecasts of a crash in international prices based on higher global output, the market has remained stubbornly firm during the last several weeks. Possibly, demand side factors and the role of funds in keeping the market on the boil were not taken into account.

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