Vegetable oil imports unlikely to breach last year’s level

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Mumbai: Experts do not see imports of vegetable oil rising in the current oil marketing year from an all-time high of 8.66 million tonne for the year ended October 2009.

According to the latest data from Solvent Extractors' Association (SEA), India imported a record 8.66 million tonne of edible oil in 2008-09 as low oilseed output and favourable duty structure pushed up supplies. “We expect edible oil imports to stay at the same level in 2009-10 or marginally increase by 7-10%. Though oilseed production has suffered during the kharif season largely owing to fall in groundnut output, higher acreage for soya will keep production at the same level,” said Rajesh Vig, executive director, PwC.

He said shifting of acreage from wheat to mustard during the ongoing rabi sowing season will also compensate for poor kharif production. "Traders, retailers and stockiest this year will focus on de-stocking rather than importing at higher levels," Vig added.

As per the latest government estimate, India's oilseed production in 2009-10 kharif season is expected to be 15.23 million tonne, down by around 15% because of low acreage and drought in several parts of western and central India during the sowing period.

Kharif groundnut production is expected to be around 4.52 million tonne, down from 5.63 million tonne last year, while soybean output is projected to be around 8.93 million tonne, down from 9.9 million tonne.

A drop in kharif oilseed production has made it vital to have good output during the rabi season so that India's dependence on import reduces. Oilseed is said to have the largest oil content (up to 44%) and it contributes to 20-25% of the total oil consumption in the country. Official data shows that till November 13, mustard seeds have been sown in around 5.49 million hectares, down from around 6.13 million hectares during the same period last year.

Some experts feel that India, the third largest importer of edible oil globally, could see a sharp rise in imports in 2009-10 if local oilseed production continues to be on the lower side. The country not only imports high volume of edible oils, its consumption pattern is also very erratic.

Income wise, the top 10% of the country's population consumes around 20 kg of edible oil per head, while the bottom 30% consumes less than 5 kg, largely because of lack of purchasing power.