Prices fail to suppress oil appetite

Demand strong despite surge in the prices of imported edible oils.

The huge price escalation in the global market failed to dampen India's vegetable oil imports with arrivals continuing to rise substantially in the first five months of the oil year (November - October).

The consumption growth in the country is largely attributed to the rise in the standard of living of the average middle class. With fat disposable incomes, consumers are spending more on edible oil for food preparation.

Therefore, the country's vegetable oil imports jumped 38 per cent during November 2007 and March 2008 at 2,264,497 tonnes as compared with 1,642,951 tonnes during the same period last financial year, according to data compiled by the Solvent Extractors' Association of India (SEA).

Import of edible oil grew 38 per cent at 1,934,381 tonnes as against 1,401,071 tonnes, while arrival of non-edible oil stood at 330,116 tonnes during the five-month period, a growth of 36 per cent from 241,880 tonnes in the corresponding period last year. 
 

SOUL FRY
Oils	Average monthly prices (US$ cif, Indian port/ tonne)
	Nov '07	Dec '07	Jan '08	Feb '08	Mar '08	Mar '07	% Rise (Mar '07-Mar '08)
RBD palmolein	982	988	1,043	1,240	1,354	640	112
Crude palm oil	930	936	1,038	1,173	1,244	609	104
Crude soybean oil	1,088	1,119	1,243	1,412	1,434	680	111
Crude sunflower oil	1,421	1,419	1,630	1,753	1,791	703	155

Edible oils imports in March were reported at 421,686 tonnes as compared with 317,930 tonnes in March 2007, up 33 per cent while non-edible oil imports were reported at 81,141 tonnes as against 64,032 tonnes, up 28 per cent.

The average cost, insurance and freight (cif) price of RBD palmolein jumped 112 per cent in the last one year to $1,354 a tonne in March 2008 from $640 a tonne in March last year.

Similarly, crude palm oil has gone up 104 per cent to $1,244 a tonne from $609 a tonne, crude soybean oil up 111 per cent to $1,434 a tonne from $680 a tonne and crude sunflower oil by 155 per cent to $1,791 a tonne from $703 a tonne.

Import of refined oil (RBD palmolein) is rising and reported at 81,710 tonnes (4 per cent of the total oil imported) during November 2007-March 2008 as compared with 27,930 tonnes (2 per cent).

Crude oil is reported at 1,852,671 tonnes (96 per cent of the total oil imported) as against 1,401,071 tonnes for the same period last year. Import of palm oil is reported at 1,706,265 tonnes as compared with 1,073,562 tonnes.

In the domestic physical market, however, prices of almost all edible oils recorded a decline of upto 25 per cent in the last one month. thus reducing the impact of the global spurt of 10 per cent in a span of five months.

Groundnut oil is on Wednesday quoted at Rs 67 a kg from Rs 58 a kg last November while refined soya oil is sold at Rs 59.50 a kg (Rs 50 per kg).

Refined palmolein oil, refined sunflower oil and expeller mustard oil are hovering around Rs 55.80 a kg, Rs 67.50 a kg and Rs 56.10 a kg on Wednesday as compared with Rs 50 a kg, Rs 63 a kg and Rs 51.10 a kg respectively.