Veg oil imports may fall 5% on increased supply

Vegetable oil imports are likely to decline by five per cent this oil year (November-October), due to rising availability from domestic mills.

According to Dorab Mistry, director of Godrej International, total import of vegetable oil may fall to 8.8 million tonnes (mt) this year as compared to 9.2 mt in the last year.

Overall veg oil imports during November-August also recorded a decline of 7.9 per cent to 6.86 mt from 7.44 mt during the same period of last year. The Solvent Extractors’ Association of India (SEA) clarified that imports in the second quarter of the oil year were low due to higher crushing of oilseeds and production of oils. Import of vegetable oils in the third quarter increased 15.4 per cent.

SEA data show the overall import of vegetable oil in the country slumped to 817,440 tonnes in August as compared to 1.06 mt in the corresponding month of the previous year. However, decline was 10.5 per cent when compared with the previous month. After three months of subsequent rise, vegetable oil imports plunged 23.2 per cent in August, due to excessive availability from domestic sources.

The decline was in sharp contrast to the general trend across the oil year. Generally, veg oil imports decline in the first half, ending April, due to revival in rabi oilseed crushing domestically. Imports rise in the second half due to non-availability of oilseed for crushing in the domestic market. The period from April to October is generally considered a lean season for the domestic oilseed crushing industry. In this period refining activity increases with imported crude veg oil.

With an estimated 31 mt of oilseed production, total vegetable oil availability from domestic sources is estimated at 7.2-7.5 mt as compared to a sustained production of 6.5-6.8 mt over the past several years.

Between November 2010 and August 2011, import of RBD palmolein was down by 17 per cent at 818,640 tonnes as compared to 987,959 tonnes during the same period last year. The share of refined oil was 12 per cent, while crude oil stood at 88 per cent, at 5.79 mt, as compared to 6.11 mt during corresponding period of the previous year.

Import of non-edible oils, used largely for soap making, during August was recorded at 31,922 tonnes as compared to 64,699 tonnes during the same period last year. The total non-edible oil imports during the first 10 months were 246,052 tonnes, as compared to 347,415 tonnes during the same period of last year, a decline of 29 per cent.