As vegoils turn cheaper, Sept imports rise 21%

Vegetable oils import increased 21 per cent in September to 10,47,620 tonnes against 8,63,917 tonnes in the same period a year ago. A sharp fall in international prices supported by higher demand in the domestic market led to large scale imports of vegetable oils.

Edible oils accounted for 10,18,767 tonnes and non-edible oils 28,853 tonnes in September, according to data released by the Solvent Extractors’ Association on Wednesday. In September, palm oil imports were 6,98,471 tonnes, accounting for 69 per cent of total shipments into the country. Soft oil shipments included 1,61,016 tonnes of soyabean, 1,32,491 of sunflower and 26,789 tonnes of rapeseed oil accounted for the rest.

Vegetable oil exporting countries such as Indonesia and Malaysia have allowed duty-free exports to reduce their burgeoning inventory before the new crop season kicks in.

Edible oil prices in the international markets have hit historical low since 2008 with projections of a bumper soyabean crop in India and the US. Domestic prices of edible oil have also fallen sharply, threatening the viability of crushing by oil mills.

Farmers who have started kharif oilseeds harvest in Gujarat, Madhya Pradesh and Maharashtra may face an uncertain future if the oil mills find imports more remunerative than crushing oilseeds domestically, said the Association.

“There is an urgent need to support the farmers by increasing import duty on crude vegetable oils to 10 per cent from 2.5 per cent and refined vegetable oils to 25 per cent from 10 per cent, to make operations of domestic oil mills viable,” it said.

The overall import of vegetable oils between November 2013 and September 2014 was up 9.5 per cent at 10,572,994 tonnes against 9,656,300 tonnes.

As on October 1, edible oil stocks at various ports is estimated at 715,000 tonnes consisting 350,000 tonnes of crude palm oil, 85,000 tonnes of refined palmolein, 150,000 tonnes of degummed soybean oil, 120,000 tonnes of crude sunflower oil and 10,000 tonnes of rapeseed (Canola) oil. Total inventory including 1,000,000 tonnes of edible oil in the pipeline works out to 1,715,000 tonnes against 1,820,000 tonnes in August.