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Suresh P. Iyengar

Mumbai, Sept 29 Huge inventory of palm oil built by the Government through imports may cap any price rise in soya oil, while sunflower oil may witness a minor hike in prices on the back of good demand during the festival season starting early next month.

However, sugar prices are expected to trade on the higher side on the back of robust demand.

Mr Dinesh Shahra, Managing Director, Ruchi Soya Industries Ltd, said prices will remain stable as the Government is already selling edible oil at a subsidiary of Rs 15 a kg.

Edible oil imports rose about 21 per cent last month after palm oil in Malaysia, the global benchmark, dropped by about a half from its March peak of 4,486 ringgit ($1,305) a tonne. Palm oil makes up 90 per cent of India’s total cooking purchases.

The Government has imported 2.27 lakh tonnes of edible oil till September 22 and supplied 1.15 lakh tonnes through public distribution system in Andhra Pradesh, Himachal Pradesh, Maharashtra, Tamil Nadu, West Bengal, Sikkim, Orissa and Chattisgarh.

The distribution will start shortly in Delhi, Rajasthan, Uttar Pradesh and Pondicherry. India buys palm oil from Malaysia and Indonesia and soya oil from Brazil and Argentina.

Imports are expected to increase 13 per cent to 5.3 million tonnes in the year to October 2008, said Mr B.V. Mehta, Executive Director of the Solvent Extractors’ Association of India (SEAI).

Unlike last year, the sharp fall in prices has encouraged companies to step up their imports, he added.

Moreover, imports were boosted after the duties on all crude edible oils was reduced to zero per cent and on refined oils to 7.5 per cent since April.

Sugar supplies in the open market is expected to increase to 2.1 million tonnes in September after the Government early this month said it will convert all unsold sugar as on September 30 from the dismantled buffer stock into levy sugar.

However, sugar millers are expecting the Government to relax the deadline for clearing buffer stocks.

The Government, which controls the sector, had told millers to clear the buffer stock by the end of September in addition to the monthly quota.

This had boosted supplies in September to about 2.1 million tonnes.

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

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