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| Vegetable oil imports expected to rise in coming months |
| Dilip Kumar Jha / Mumbai Mar 03, 2010, 00:32 IST |
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Likely to go up to 9.5 million tonnes during the current oil year.
 After a 2 per cent fall in January, import of vegetable oil into the country is likely to rebound in the coming months on rising demand due to growing incomes. With an average rabi crop and below-average kharif crop during the 2009-10 season, output from domestic sources is not expected to rise above the norm this year.
According to an industry estimate, packers, refiners and sellers are re-building their inventories for consumption in the coming wedding season. Also, the recent festive demand has almost exhausted the inventory which was estimated at 800,000 tonnes by the end of December 2009.
The industry had wanted the government to either restore import duty in Budget 2010-11 or revise the base tariff upwards. Instead, the government allocated Rs 300 crore to organise “pulses and oilseed villages” in rain-fed areas and provide an integrated intervention for water harvesting, watershed management and soil health. This means each rain-fed village will get a sum of Rs 50,000, a drop in the ocean, said B V Mehta, executive director of the Solvent Extractors Association (SEA).
Oilseeds production has been stagnant for quite a while at 26-27 million tonnes a year and productivity at 950 kg per hectare. The country is heavily dependent on imports. In the last oil year (November 2008-October 2009), the import was 8.6 million tonnes, at a cost of Rs 27,000 crore. This is likely to go up to 9.5 mt during the current oil year (2009-10), an estimated foreign currency outgo at about Rs 50,000 crore. Dependence on import of vegetable oils has increased to over 55 per cent of demand over the past few years. It is a matter of food security and the country cannot afford to depend so heavily on import of such food items, Mehta said.
According to SEA, vegetable oil import was 872,395 tonnes in January 2010, against 888,102 tonnes in the corresponding month last year. In the first three months of the current oil year (November-October), imports rose by 10 per cent, at 2.41 mt, from 2.19 mt in the corresponding period last year.
According to an estimate, 65 per cent of crushing capacity is unutilised, even in the current peak season. This is due to imported oil being much cheaper, which is why the SEA demands protection. However, given the food inflation rate in double-figures, the government appears reluctant.
A paper presented by an industry expert, Dorab Mistry, estimated India’s per capita vegetable oil consumption would be 13.1 kg in 2009-10, as compared to 12.86 kg last year and 11.4 kg during 2007-08.
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