 "oil")
Weaker consumer demand, attributed partly to demonetisation, with higher availability from local sources, might lower the country's import of edible oil in the current oil year (November 2016 to October 2017).
Official data shows a 41 per cent increase (first advance estimate) in oilseed output at 23.36 million tonnes for the kharif season, harvesting of which is on. The fourth advance estimate shows output for 2015-16 at 16.59 mt. With the increase in rabi sowing, oilseed output in that season is estimated to be a bumper one; the previous rabi saw output at 8.71 mt.
"The additional output could yield at least 1.2-1.4 mt of more edible oils from domestic sources. Assuming additional annual demand of around a million tonnes due to increasing population and consumer growth of four per cent, the additional production would be able to meet the extra requirement. So, import would be either similar or marginally lower to last year," said B V Mehta, executive director, the Solvent Extractors' Association of India (SEA), the industry body representing around 850 entities of the edible oil sector.
SEA data shows a 12 per cent decline in India's vegetable oil (both edible and non-edible) import at 1.18 mt last month, as compared to 1.34 mt in the corresponding month last year. India's total import was 14.57 mt for oil year 2015-16, marginally higher from the 14.42 mt in oil year 2014-15.
"Per capita (annual) consumption is approaching 16 kg and if we add the higher consumption of dairy fats, it is almost 18 kg. With the demonetisation announcement on November 8 of 86 per cent of the currency in circulation, most cash transactions came to a halt , disrupting normal business transactions. It is leading to much lower levels of buying, selling and transportation of goods. It is estimated that imports will shrink in the meantime and India will rely on its internal pipeline and stocks for current consumption," said Dorab Mistry, director, Godrej International.
Overall, for oil year 2016-17, availability of locally produced vegetable oils is expected to rise by about one mt. Therefore, an increase in imports is forecast to remain only at 200,000 tonnes, said Mistry.
Siraj Chaudhry, chairman, Cargill India, said a lower import forecast could be premature, as availability from local sources depended on many factors. Experts say the impact of demonetisation on consumer demand would normalise in the months to come. Total stock at ports and in the pipeline is currently 1.94 mt, slightly higher than the monthly requirement is about 1.65 mt. This means supply would not be hit even with no import for a month.
