The Hindu Business Line : Cooking oils import nearly trebles in Feb

Chennai, March 17 A tendency to buy more in order to hedge against sharp rise in prices led to cooking oil imports almost trebling during February. According to the Solvent Extractors Association of India (SEA), edible oil imports increased to 4.31 lakh tonnes (lt) against 1.51 lt during the same period a year ago.

The rise in edible oil imports when prices were ruling high in the global markets has also caught the industry by surprise.

“Indian edible oil importers have bought in the global market as a sort of cover since the prices were practically going up every day until last week,” said Mr B.V. Mehta, Executive Director of the SEA.

But trade analysts said imports could slow down now that the prices, especially soyabean on Chicago Board of Trade, have begun to decline. “In the falling market, no one would be willing to open letters of credit for purchase,” a Chennai-based analyst said.

Higher carryover stocks

Mr Mehta said in the normal course, the high prices would have witnessed a demand squeeze. “But that did not happen for two reasons. One was that imports were less last year as higher rapeseed carryover stocks acted as a hurdle. Two, the per capita income of our people has increased that they are able to absorb the rise,” he said.

The increasing imports are seen as a proof of the buying power of the middle class, which is able to afford more in view of the economic growth.

Last year, the higher rapeseed stocks with the National Cooperative Agricultural Marketing Federation ensured that about 1-1.5 lt of rapeseed oil flowed continuously in the market every month. In contrast, the carryover is less this year.

For example, last year the carryover stock of rapeseed on March 31 was seen at around 15 lt. This time, it is expected to be less than five lt.

ruling high

SEA data, released on Monday, also revealed that sunflower oil imports into the country have come to a total halt. This is in view of its price ruling high. “Imported sunflower oil prices are higher than groundnut oil,” said Mr Mehta.

During February, crude sunflower oil averaged around $1,750 a tonne c.i.f against $690 during the same time a year ago. In fact, all cooking oils ruled above $1,100 a tonne during February (see table), with prices having doubled for almost all.

As per the data, imports of vegetable oils for edible and non-edible purposes during November-February of the current oil year to October, increased 40 per cent to 17.61 lt. Of this, crude oils made up 95 per cent and refined the rest. Again, palm group of oils made up 89 per cent of the total imports, while soyabean and other oils made up the rest. Last year, this ratio was 79:21.

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