More edible oil import likely in coming season

Area sown under soybean declined by a little over 10% or 1.22 mn ha to 10.9 mn ha as of Aug 21

India’s reliance on edible oil import is expected to set a new record in the next crushing season, beginning November. For, with a steep decline in sowing of oilseeds because of a delayed monsoon, production estimates have been lowered.

Data from the Union ministry of agriculture showed the area sown under soybean declined by a little over 10 per cent or 1.22 million hectares to 10.9 mn ha as of August 21. Similarly, that under groundnut is down 14 per cent or 566,000 ha to 3.51 mn ha. The sowing season is now over.

Therefore, vegetable oil output is estimated to decline at least by 500,000 tonnes during the next crushing season. Also, consumption is expected to rise more than the usual yearly increase of 3.5 to four per cent. “This means, edible oil consumption will set a new record of 19 million tonnes (mt) next year (November 2014–October 2015). Since overall kharif acreage has declined this season, import reliance will naturally increase,” said B V Mehta, executive director of the apex industry body, Solvent Extractors’ Association of India.

Last year, oil import was 10.6 mt and is likely to surpass 11 mt by the end of the current season, end-October. Next year, it is expected to hit 12 mt, a record.

“We believe imports will be sharply higher at around 11.5 mt this year, due to the good economy and lower prices. We are expecting these could be up by 10–11 per cent in the current fiscal year as against last year,” said Dinesh Shahra, managing director, Ruchi Soya Industries.

He believes India’s edible oil demand is expected to grow by at least five per cent. It is also dependent on whether the rupee strengthens and on economic growth. Demand in the packed and branded segment is expected to grow 20-25 per cent.

“Looking at the branded market’s potential, we are focusing on our brands’ portfolio. We have recently re-launched an advanced and fortified variety of one of our popular sunflower oil brands. To further enhance our market share in soyabean and sunflower oil, we have added many brand ambassadors to advertise our products,” said Shahra.

Globally, there is oversupply of vegetable oil, keeping their prices subdued. Dorab Mistry, director, Godrej International, said production gad been better than expected at home; also, Indonesia and Malaysia, both major producers, have failed to implement their palm biodiesel targets. “We also have the biggest soybean crop in history likely to be harvested shortly in USA,” he said.