India's vegetable oil imports surged 37 percent to a record in 2008/09, fuelled by higher consumption and low taxes, but imports in October, the last month of the oil year, dipped as expected. India, the world's top vegetable oil buyer, imported 8.7 million tonnes in the year.
"The current trend gives a hint that imports would touch 10 million tonnes in 2-3 years," said B.V. Mehta, executive director of the Solvent Extractors' Association of India. Mehta said the record imports had reduced the country's self sufficiency as nearly half of its demand is now being met through overseas purchases.
The value of total imports, which include both edible and non-edible oils, rose 12 percent to 280 billion rupees ($6.06 billion). "Such huge import dependence is a cause of concern for local oilseed growers," said Veeresh Hiremath, a senior analyst with a Hyderabad-based brokerage, Karvy Comtrade.
India's vegetable oil imports in October fell 19 percent to 667,276 tonnes from 826,848 tonnes a year earlier, the SEA said in its latest monthly update. As the local soybean crushing season began, traders had expected edible oil imports to fall an annual 23 percent in October to 606,580 tonnes, a reversal from record monthly imports in September.
The industry body said a rise in per capita consumption of cooking oil and low import taxes were the main reasons for the rise in imports. "Zero import duty on crude edible oil and very nominal duty on refined palmolein have favoured the imports over domestic oils," said Mehta.
India imposes an import duty of 7.5 percent on refined oils. The depreciation of the US dollar against Indian currency by about 5 percent has also made overseas purchases cheaper. After record imports in September, monthly edible oil imports fell 29 percent to 615,066 tonnes in October, and were down 22 per cent from a year ago. India, the world's leading vegetable oil importer, buys mainly palm oils from Indonesia, Malaysia and a small quantity of soyoil from Argentina and Brazil.
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