The Indian Vegetable Oil Producers’ Association (IVPA) is expecting the import of edible oil to come down during the oil year 2021-22 (November to October).
Speaking at a virtual conference organised by UOB of Malaysia, Sudhakar Desai, President of IVPA, estimated the import of edible oils at 12.96 million tonnes (mt) during 2021-22 against 14.01 mt in 2020-21. Of this, the import of palm oil is estimated at 7.63 mt (8.89 mt) and sunflower oil at 1.50 mt (1.96 mt). According to IVPA estimates, import of soyabean oil is likely to go up to 3.80 mt during 2021-22 against 3.13 mt in 2020-21.
Domestic output to chip in
Desai estimated the domestic vegetable oil production at 9.25 mt during the oil year 2021-22 against 8.43 mt in 2020-21.
Stating that soyabean production in India is up by 1.3 mt at 10.5 mt, he said the overall domestic oil availability will be higher by 9,00,000 tonnes at 9.3 mt during 2021-22 as the crushing pace of soyabeans will pick up.
Mustard seed production will be up by 23 per cent to reach 10.75 mt during the year. Stocks are comfortable in the current scenario, and the immediate mustard arrivals should provide some relief in prices as the crop is big and stock controls will ensure that there is no speculative rally in process. He opined that mustard crushing is expected to peak during April-June.
On the availability of edible oils in the country, he said the stocks (both domestic and imported) are at comfortable levels now. Import of edible oils could be in the range of 8,50,000-9,00,000 tonnes each during March-June months.
Price factor
Referring to the impact of edible oil prices on consumption, he said ‘boiling price point’ of oils is the new biting point now, and there could be a consumption drop of about 2.5-3 per cent because of this. Demand rationing could be around 5,00,000 tonnes, he said.
Terming palm oil as the ‘palm olive oil’, he said it is the costliest oil now. On the restrictive export regulations of Indonesia on palm oil, he said Indonesia should ease exports and increase supply. It should review its bio-fuel mandates. If it decides to implement the B20 bio-fuel mandate instead of B30, at least for six months, it will resolve not only the inflationary pressure in Indonesia but also in the region.
On sunflower oil, he said disruption in the shipment from Black Sea because of the current situation in the region, and the impact on the sowing of sun seeds in April may have an impact on price. There is a short-term need to find alternatives to sunflower oil such as rapeseed oil, groundnut oil, and soyabean oil etc, he said.
Global production
He estimated the global production of major four vegetable oils – palm oil, soyabean oil, sunflower oil and rapeseed oil – at 184 mt during 2021-22 (October-September), up by 4.6 mt. However, the high prices of edible oils is likely to lead to the decline in consumption.
The global palm oil production is expected to be in the range of 75.6 mt in 2021-22 against 73.94 mt.
On soyabean crop production, he said Brazil’s production is estimated at 132 mt (137 mt). Argentina’s production is likely to remain flat at 43 mt.
In the case of sunflower crop production, he said it is likely at 33 mt (26 mt) for Russia and Ukraine.