Tight supplies and hopes of a cut in import duty in the Budget sparked heavy purchases.
Mumbai, March 8
VEGETABLE oil imports during February were an estimated 4.35 lakh tonnes, considerably higher than the previous three months' average of 3.15 lt, according to a data compiled by the industry portal Oilmandi.com and made available to Business Line.
Imports comprised in the main 1.92 lt of degummed soyabean oil; 1.88 lt of crude palm oil; and 38,250 tonnes of crude palmolein. Small parcels of refined palmolein, crude palm kernel oil and crude sunflower oil were also received and accounted for the balance.
With this, the total imports during the first four months of the new oil year (2004-05) were 13.8 lt versus 11.5 lt in the same period the previous year. Traders said tight supplies in the domestic market and widespread anticipation of a reduction in import duty in the Budget sparked heavy Indian purchases during January.
Some players in the trade forecast that India's vegetable oil imports during oil year November 2004-October 2005 would be little changed from 44 lt imported during the previous year.
However, the trend in imports so far, domestic oilseed production prospects and the fact that demand for edible oil has the potential to rise sharply this year following strong income growth suggest annual arrivals may be at least 10 per cent higher and reach close to 50 lt.
The ongoing harvest of rapeseed/mustard and market arrivals should keep domestic prices on the leash for some time. Many forecasters are now progressively reducing their crop estimate for rapeseed/mustard from as much as 75 lt over a month ago, the estimates now are down to 66 lt-67 lt.
The domestic market will have to reckon with developments in the international market. At the recently concluded Palm Oil Price outlook conference, there was near unanimous opinion that notwithstanding current fundamentals balanced demand-supply position palm oil would stay firm with a distinct upward bias.
Obviously, the tariff policies of the Indian Government have to take into account emerging global situation.