Imports of vegetable oils declined 11 per cent in November due to improved supply from local crushing units since the beginning of the new season.
Data compiled by the Solvent Extractors’ Association of India (SEA) showed that India’s total vegetable oil imports slumped to 668,917 tonnes compared to 753,966 tonnes in the corresponding month of the previous year. B V Mehta, executive director of SEA, attributed the fall to higher availability from local crushing mills and volatility in the rupee.
Indian vegetable oil industry comprises 15,000 oil mills, 600 solvent extraction units, 600 vegetable oil refineries and 250 vanaspati units spread across the country that crush/process oilseeds, oilcakes, rice bran and vegetable oils. Apparently, a majority of units have started crushing oilseeds, with hopes that mills will run in full capacity throughout the six months due to bumper seed crop this season.
As a consequence, edible oil output from domestic sources this season is estimated to rise to nearly seven million tonnes from a little over 6.5 million tonnes last year.
Moreover, the strengthening rupee lured traders and refiners to stock full quantity in order to fetch higher profit if the rupee weakens to average over 46 against the dollar. Weakening of the rupee makes imported goods costlier. Hence, traders of such commodity build inventory full to their capacity when value of the local currency goes down.
The average value of dollar against the rupee declined sharply to 44.75 in October from 45.50 in September and 46.75 in August. But, it slightly jumped to 45.50 in November this year, as compared to 1.6 per cent decline from the average 46.25 in the comparable month of the previous year.
The domestic turnover of the vegetable oil industry is pegged at Rs 100,000 crore this year, while the import-export turnover is estimated at Rs 45,000 crore.
During November, import of refined, bleached and di-odized palmolein was reported at 70,516 tonnes as compared to 112,604 tonnes in November 2009. Share of refined oil and crude oil was reported at 11 per cent and 89 per cent, respectively.