Edible oil imports to decline by Feb

The imports of vegetable oil, which surged abnormally in the last quarter-ending December, is likely to decline by the end of next month when harvesting of rabi oilseed crop begins.

“Edible oil-packing companies that could not meet their requirements locally from inter-state trade, had to meet their capacity through imports in anticipation of the government levying customs duty on palm oil. But, the imports would turn normal by February-end as the inventory pipeline will be full and the industry will run out of capacity by then,” said Dinesh Shahra, managing director of the country’s largest soybean crusher Ruchi Soya Industries.

The country’s edible oil imports surged 80 per cent to 2,024,809 tonnes during the quarter-ended December 2008 compared to 1,125,138 tonnes in the comparable quarter last year, the data compiled by the Solvent Extractors’ Association (SEA) showed. Most importantly, imports of non-edible oil which is mostly used in soaps and other products, fell 45 per cent to 102,944 tonnes during the December quarter versus 150,034 tonnes. Consequently, total vegetable oil imports recorded at 2,127,753 tonnes, a rise of a staggering 67 per cent from 1,275,172 tonnes in the quarter ended December 2007.

Eventually, there has been no rise in consumption here, Shahra added.

Because of lower price of seeds and beans, farmers are not bringing their produce to the market. They prefer to wait for price correction. Therefore, processors or packers have no option but to import either crude or refined vegetable oil to meet their requirement, said Rajesh Agarwal, spokesperson, the Soybean Processors’ Association (SOPA), an Indore-based industry body.

Recently, the government levied an import duty of 20 per cent on refined soy oil imports which is insignificant in overall imports. In December 2008 alone, the import of soybean oil was 60,899 tonnes while 7,500 tonnes were imported during November - December of the last year.