Import of edible oils to continue

All the political parties in India favoured economic and trade liberalization, and therefore vegetable oil imports would continue as before without significant changes in the import regime or import duty rates.

However, the Indian government had run out of ideas and could not encourage expansion of oilseed acreage in the current year. Instead, the government fiddled around with carotene value.

India's oilseed farmers had experienced the benefits of trade liberalization and the WTO. After a huge groundnut crop, India exported groundnut oil.

This prevented the domestic price of groundnut oil from collapsing under harvest pressure and gave groundnut, soyabean and rapeseed farmers good prices.

According to Dorab E Mistry, director of Godrej International Limited,"The scenario for the first half of the year, the period upto April 2004, is clearly bullish. Prices need to hold at a level which keeps demand under control and encourages greater acreage."

In a paper titled "India- Impact of bumper monsoon rains on price outlook 2004" presented last week at Kuala Lumpur, he said world stocks of grain are at a five year low and wheat, rice and corn prices were attractive.

Land for cultivation of oilseeds would run short in USA, India and China. In the Asian nations, oilseed acreage would not rise unless oil and meal prices strengthened.

In May and June, arrival of the South American crop could push prices down. Between July and October, prices would rise owing to demand from China, India, Pakistan and Bangladesh, Mistry said.

A weak Indian monsoon would drive underground the large rapeseed crop. Normal rainfall would lead to big crops from November onwards, forcing down prices.