A substantial reduction in sale of oilseeds by farmers has pushed up edible oil imports in past two months. This is largely on account of a bumper output of soyabean, mustard and groundnut, which has increased the availability of oilseeds for crushing in the country, and this has brought down the prices of seeds well below minimum support price (MSP). Though earlier it was expected that the bumper crop would lead to a drop in imports by at least 5-7%, industry sources are now predicting imports to be at the same level as last year.
It may be mentioned that as against MSP of Rs 2,775 per quintal, soyabean prices in June this year are ruling at Rs 2,550 per quintal while prices of rapeseed stand at Rs 3,250 against MSP of Rs 3,700 per quintal. Similarly, groundnut traded at Rs 3,500 as against MSP of Rs 4,220 per quintal.
“Less availability of oilseeds have increased the edible oil import in past two months. While crop size is big this year but as prices have gone down below MSP, farmers are not selling their oilseeds. Earlier, we had estimated lower imports but now it seems that we will match the last year’s figure,” said B V Mehta, executive director of Solvent Extractors’ Association (SEA).
However, Mehta also believes that farmers will commence selling in the near future which will enable edible oil producers to secure supply in coming months.
As per the data provided by SEA, during past five years, edible oils imports have seen growing trend on monthly basis but imports witnessed a decrease in the first five months this year. “Unfortunately, the trend has reversed again in the past two months on account of limited availability of seeds,” Mehta stated.
The country’s total edible oils imports have been to the tune of 8.52 million tonnes in first seven months of current oil year as against 8.59 million tonnes in corresponding period last year. Import of vegetable oils during oil year 2015-16 (November to October) were reported at 14.74 million tonnes compared to 14.61 million tonnes for the same period of 2014-15.
SEA has estimated the country’s kharif oilseeds production for 2016-17 at 29.35 million tonnes as against 24.07 million tonnes in 2015-16. Because of this huge production, oilseeds prices are ruling below MSP and as a result farmers are unwilling to sell. According to the edible oil industry, after two years of drought, the current year witnessed bumper oilseed production but the increase in production has not brought any cheer to farmers as prices have collapsed below the MSP.
Atul Chaturvedi, chief executive officer of Adani Wilmar and president of SEA said, “Import duties on crude oils should be raised to 20% from a level of 7.5% on crude palm oil and 12.5% on soft oils with immediate effect. Import duty on refined oils should be raised to minimum 35% from 15% on palmolein and 20% on other refined oils. These decisions would have practically no effect on inflation as edible oil availability in the world is very good on back of huge crops worldwide.”
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Earlier this month, SEA had made representation to the Centre and will again meet the officials to discuss the issue for the benefit of the farmers in the country. According to Chaturvedi, if farmers don’t receive the expected return for their produces, they may even shift to other crops in coming kharif season.
By Vimukt Dave