Less consumption might hold back edible oil import growth

Edible oil imports from India might go up by 10 per cent in the new season starting November, to 9.2 million tonnes (mt). This is the rough estimate of the department of food under the Union ministry of food and consumer affairs, responsible for distribution of edible oil under the Public Distribution System.

Officials say it was estimated imports might go up to 9.5-10 mt in the current season but consumption is down owing to high prices. They estimate this year’s consumption at 17 mt, about 500,000-700,000 tonnes less than last year. Due to an erratic and late monsoon, the supply of domestic oilseeds will be 10-12 per cent less but the constraint in supply is expected to be compensated for by depressed demand. In 2012-13, the domestic supply of edible oil is pegged at 7.1 mt as compared to 7.6 mt last year.

The rough estimate of oilseed production is around 30 mt as against 32.4 mt last year. “Going by this estimate, imports should ideally be around 10 mt in 2012-13 but the depressed consumption might keep these below 10 mt. If consumption keeps falling, then it might even be around nine mt,” said official sources.
 

VARIATIONS IN SUPPLYING

• Edible oil imports might go up by 10% in the new season starting November, to 9.2 million tonnes (mt)
• The supply of domestic oilseeds will be less by 10-12% due to an erratic and late monsoon
• The rough estimate of oilseed production is around 30 mt, against 32.4 mt last year
• The constraint in supply is expected to be compensated for by depressed demand due to high prices

Incidentally, international prices of edible oil are down and imported edible oil prices are being pushed up by the floating structure of the import tariff and rupee depreciation, said a source. The government revised the tariff on refined palmolein oil to $1,053 per tonne from $484 in July. It had been constant for six years and is now revised every fortnight. Currently, the tariff is around $1,014 per tonne. Sources said even with the depreciated rupee and floating tariff, the import price of RBD palm oil was $1,004 per tonne in August as against $1,192 per tonne in August 2011.

Data from the Solvent Extractors’ Association (SEA) shows import of vegetable oils (edible & non-edible) during the first 10 months of the current oil year (November 2011-August 2012) was 19 per cent higher compared to last year’s corresponding period.

High prices of oilseeds in the domestic market have resulted in less export of oilmeal cake. SEA says export of oilmeal during August was 120,091 tonnes compared to 291,466 tonnes in August 2011, down 59 per cent. The total export of oilmeal during April to August was 1,457,663 tonnes compared to 1,694,301 tonnes during the same period of last year, down 14 per cent.