The Hindu Business Line : Edible oil imports seen rising 5 lakh t

THE country's edible oil imports are likely to increase by five lakh tonnes. The increase in imports is actually being capped by a recovery in the rabi oilseeds crop.

"Despite soyabean crop production being cut by the industry and mustard crop being affected by frost, edible oil imports may be 10 per cent higher this year," said Mr B.V. Mehta, Executive Director, Solvent Extractors Association of India.

Rabi oilseeds crop has been projected higher by both the industry and the Government, though the latter has pegged it at a higher level. The industry has projected an output of 95.7 lakh tonnes (94.1 lakh tonnes last year). On the other hand, the Government has estimated the production at 100.1 lakh tonnes (lt).

The Government's higher figure is primarily due to its projection that the mustard/rapeseed crop will witness a record 75.89 lt production against the industry's projection of 62.5 lt.

"Leaving aside the different forecast on the oilseeds crop, the fact is that there will not be flood of edible oil imports," industry sources said.

"This year, we are having a record cotton crop of over 230 lakh bales (of 170 kg). Therefore, at least 1.5 lakh tonnes of cottonseed will be used for consumption," Mr Mehta said.

During the current oil year (November 2004-October 2005) till February, edible oil imports had increased by 19 per cent to 13.67 lakh tonnes against 11.53 lakh tonnes during the same period a year ago.

"Imports were up during November-February mainly since the prices were low and also because kharif oilseed crop was affected by dry weather and untimely rains," the sources said.

Kharif oilseeds crop this year declined to 123.6 lt against last year's record 138.9 lakh tonnes. According to the Agriculture Ministry, this year's kharif oilseeds output is 147.61 lt against 160 lt last year. In this, it has pegged soyabean output at 77.52 lt, while the industry has put it at around 58 lt.

Industry players point out that last year, the imports had declined to 43.96 lt from 51.14 lt the previous year.

"Going by the same trend only we see imports touching around 50 lt," the sources said.

"Edible oil is price elastic, which means consumption declines if the rates rise and vice-versa. Therefore, the scope of either prices rising or imports increasing is limited," Mr Mehta said.

The current rising trend in global vegetable oil prices is also likely to dampen imports. Currently, the prices are looking up on fears of soyabean crop in South America being hit by dry weather and Asian rust hitting the US crop.

Currently, domestic edible oil prices are lower than the rates that prevailed during the same time a year ago. While refined rapeseed/mustard oil price on Tuesday ruled at Rs 410 for 10 kg against Rs 465 last year, groundnut oil ready was at Rs 463 (Rs 494). Refined soyabean oil quoted at Rs 376 (Rs 437), while refined sunflower was at Rs 410 (Rs 475). RBD palmolein was also lower at Rs 375 against Rs 438 last year.

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