Edible oil imports jump 19% on lower global price

MUMBAI: With a 19% jump in India's edible oil imports in 2007-08, the industry feels that the government should impose import duty as the prices of edible oil are down by over 35% in the past two months in the domestic market. A further fall will affect the farmers and industry as well, they added.

Edible oil imports rise to 56 lakh tonnes during oil year Nov-2007-Oct-2008 as against 47 lakh tonnes last year due to rise in imports of palm oil and its products to 48 lakh tonnes from earlier 31.7 lakh tonnes following a duty reduction and fall in international prices.

In October there was record monthly jump in total vegetable oil (edible+non-edible) imports at 8.3 lakh tonnes - its highest since 1994. Of total imports, edible oil was 7.9 lakh tonnes, while non-edible was 0.4 lakh tonne. This was against 5.4 lakh tonnes in the same quarter of the previous year.

According to Solvent Extractors Association of India (SEA), of the total edible oil imported, import of crude palm oil (CPO) and other palm products increased to over 51% at 48.1 lakh tonnes, while the soft oil imports reduced to 7.9 lakh tonnes from 15.4 lakh tonnes.

India imported more of crude palm oil (CPO) as there was $350 per tonne of difference between the landed cost of CPO and crude soyabean oil.

Vegetable oil prices were at peak during March-April 2008, that led government to remove import duties. However since August, prices have crashed to levels of November 2006, but government has still not reviewed the import duty. This resulted into heavy imports in last two quarters of the year, said SEA.

Soyabean Processors Association of India (SOPA) spokesperson Rajesh Agrawal said that the government should impose duty to support the farmer and industry. "A 30% duty can increase the price of edible oil by Rs 5-6 per kg but since the prices are at rock bottom levels consumers can absorb this increase," he said.

Domestic arrivals of soyabean are down to between 500,000 and 600,000 bags per day that used to be 10 lakh during this period and prices have come down to Rs 1,500 per quintal against Rs 2,500 that farmers received last year during this time.

SEA executive director BV Mehta said: "Since farmers are realising low price they may think of going for a different crop in coming season and that may also affect the availability of raw material for the crushers.