Veg oil imports to rise by 9% in 2011-12 oil year

India imported 8.8 million tonne vegetable oils in 2010-11 oil year

India's vegetable oil imports are expected to rise by 9% to 9.48 million tonnes (MT) in the current oil year, an industry expert has said.

The country had imported 8.67 mt of vegetable oils in the 2010-11 oil year (November-October).

"I feel confident that India will import about 9.475 mt as outlined by me at POC in March for the oil year November 2011 to October 2012," Godrej International Ltd Director Dorab E Mistry said in a statement.

In the first half of the oil year 2011-12, the import of vegetable oils (comprising edible and non-edible oils) rose by 31% at 4.71 mt, according to data compiled by Mumbai-based Solvent Extractors Association of India (SEA).

According to analysts, India, which imports about 50% of domestic demand, will witness a rise in vegetable oil imports due to a drop in oilseed production.

India's oilseeds production is estimated to have declined to 30.06 mt in 2011-12 crop year (July-June) as against 32.47 mt in the previous year. Production of mustard seeds and groundnut, which have more oil content, have fallen sharply.

Mistry said that the decline in the rupee against the US dollar is a problem.

"As regards India, the single biggest disappointment has been the decline in the value of the rupee. This has made the problem of imported inflation even more acute," he said.

The rupee today rose by 32 paise to trade at 55.10 against the US dollar in early trade as the American currency weakened against euro overseas. It had lost 48 paise to close at 55.42 against the Greenback in the last session.

The Indian economy and the stock market have not performed well and are now suffering the impact of slow growth in the rest of the world, Mistry added.

Mistry said that palm oil imports will fall in the coming months due to weak rupee and slow growth.

"India's imports of palm oil so far are well ahead of the previous year but from now onwards the monthly import figure will be almost the same as in the previous year. The period of out-performance has come to an end," he added.