1. Solvent extractors complain of raw material shortage

Solvent extractors complain of raw material shortage

Solvent extractors in the country have complained that they are not getting enough raw material for processing and therefore the capacity utilisation of the units has gone down to 30-35%.

By: | Published: June 24, 2015 12:10 AM

Solvent extractors in the country have complained that they are not getting enough raw material for processing and therefore the capacity utilisation of the units has gone down to 30-35%.

With the oilseed production remaining stagnant at 27-28 million tonne, the challenge before the industry is how to meet increasing demand from the domestic market in addition to meeting the export demands, industry observers say.

The Solvent Extractors Association of India (SEAI) has approached the Centre to permit the import of all oilcakes and rice bran at nil duty to increase overall availability of feeds for cattle and poultry.

According to BV Mehta, executive director, SEAI, if the import of edible oilcake is permitted at nil duty, extractors could get raw material for processing which could be consumed locally and the end product for the feed industry will also be available for export and the local feed industry in the country could get this at reasonable prices.

At present, the import duty on oilcakes is to the tune of 15%. India imports around 11 million tonne of edible oil. The industry has been in a bad shape this year, say observors. There has been huge production of soyabean in the international markets such as Argentina, Brazil and the US and therefore meal prices have gone down heavily, Mehta said.

As against an FOB price of $600 per tonne in India, the soyameal prices internationally are $ 450, as a result exports have dropped down from 30 lakh tonne last year to 6-7 lakh tonne at present. The soyabean industry in the country has remained stagnant because the bean prices are high and crushing has not been supported since the extractors stand to lose around R1,000 per tonne as this imported oil is cheaper, he pointed out.

Moreover, Iran has now begun importing directly from Argentina and Brazil, thus making India lose an important market. Vietnam has established a couple of 5,000 tonne processing units and has begun locally crushing oilseeds. Japan, another important market for India, has moved to GMO and reduced imports from India, officials pointed out.

Of the 400 crushing plants in India, 100 units process soyabean. The country has around 9 million tonne of soyabean. Pravin Lunkad, president, SEAI, says if import is allowed at nil duty, the country can process for neighbouring markets as well as local use. The total industry size is around $20 billion of which only $ 9 billion is available locally.

Import of vegetable oils during May 2015 witnessed a record tonnage of 1,371,662 tons since import started in 1994 compared to 1,033,550 tons in May 2014, consisting of 1,358,688 tons of edible oils and 12,974 tons of non-edible oils i.e. up by 33%. The overall import of vegetable oils during Nov.’14 to May ’15 is reported at 7,833,524 tons compared to 6,198,541 tons i.e. up by 26%.

High prices of soyabean and lesser realization for oil and soyabean meal in export market resulted in lower crushing and lesser oil availability in domestic market.

The excessive import during current oil year and particularly in May’15 confirms that domestic production of soyabean and rapeseed is lower than estimated earlier at COOIT’s Rabi Seminar held at Jaipur in March ’15.

India’s monthly requirement is about 16 lakh tonne against which currently holding stock over 22.5 lakh tonne equal to 43 days requirements. During November ’14-May ’15, with increase in overall import, palm oil import increased to 5,116,361 tonne from 4,332,848 tonne during the same period of last year.

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