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| Edible oil inventory surges 50% on import glut |
| Dilip Kumar Jha / Mumbai Jul 15, 2009, 00:52 IST |
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Despite an estimated 20 per cent increase in consumption, pipeline inventory of edible oils has surged 50 per cent in the first eight months of the current oil year (November-October) following a glut of cheap imports from Malaysia, Indonesia and Argentina.
Against 600,000-650,000 tonnes of stocks normally held with refiners and stockists, the inventory has surged to 900,000-950,000 tonnes now, which industry experts see as alarming for farmers.
As a normal practice, the industry keeps 600,000-650,000 tonnes of inventory in the supply chain. Import orders for similar quantity are passed to keep the ball rolling. But, sustained fall in prices lured importers of all classes, including perennial and occasional players, to build inventory at a cheaper price in anticipation of a surge in future.
The development is significant as lower returns from oilseed may prompt farmers to divert crops to other crops in the ongoing kharif sowing season, said B V Mehta, executive director of the Solvent Extractors’ Association (SEA).
Sowing of major oilseeds during the ongoing kharif season has intensified with the revival in monsoon. According to Rajesh Agrawal, coordinator and spokesperson for the Indore-based Soybean Processors’ Association (SOPA), about 80 per cent sowing is complete, while the remaining would be covered in coming days. But, much would depend on monsoon’s follow up, he added.
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