India is expected to hold the highest-ever inventory of oilseeds of 1.5-million tonnes in the oil year ending next month. This is despite the government raising import duty to discourage edible oil import and encourage crushing of oilseeds produced within the country.

Atul Chaturvedi, President, Adani Wilmar (the producer of Fortune brand edible oil), and President, Solvent Extractors Association of India, said most of the farmers did not reap the benefits of their harvest last year due to low prices. The government decision to hike import duty will bring down the inventory from an earlier estimate of 2-million tonnes to 1.5-million tonnes by encouraging processors to use seeds produced domestically for crushing.

However, he said the inventory level will still be the highest-ever and come in hand with expectation of output falling next oil year. The area under soyabean cultivation has fallen by 1-million hectares as farmers switched to other remunerative crops.

The Ministry of Commerce raised import duty on CPO to 15 per cent from 7.5 per cent, and that of refined oil was raised to 25 per cent from 15 per cent.

Experts expect soyabean output in India to decline to 8.5-million tonnes in the next oil year due to sharp fall in acreage. Data compiled by the Ministry of Agriculture showed a decline in acreage of 200,000-lakh hectares, around 15 per cent from the previous year.

Speaking on the sidelines of the Globoil India 2017, a three-day annual event, Chaturvedi said the country would end up importing 15.2-million tonnes of edible oil this oil year against 14.6-million tonnes shipped in the previous year.

James Fry, Chairman, LMC International, a London-based agriculture commodities trading firm, said crude palm oil prices will fall to 2,400 ringitt a tonne by the current year-end due to a sharp rise in supply from Malaysia and Indonesia – the world’s largest producers and exporters to India.

The fall in CPO is expected to curb price rise in other edible oils, including refined oil, sunflower oil and soyabean oil. The demand for CPO from bio-diesel producers is expected to be limited due to lower crude oil prices.

Import bill Lower edible oil price globally would result in the fall in import bill for India, as the country largely depends on imports to meet the domestic demand. India imports between 11-12-million tonnes of crude palm oil annually.

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