By Ziad P S
MUMBAI (Commodity Online): India’s edible oil imports witnessed a whopping surge during the oil year ended October 2009, though lot more domestic oil seeds were left uncrushed due to free import duty.

Total imports of edible oil were about 37% up to 86.6 lakh tonnes valued over Rs. 28,000/- crores as compared to previous year. There had been a peak level for the edible oil prices at the global market when the government scrapped the import duty in order to boost the domestic supply.

The government had re-imposed the import duty as the prices crashed in the international market about 50% in the October and November, for the sake of domestic farmers and the industry. The edible oil prices in the domestic market are at 50% off.

Trading platform that even a 5 year old can trade. Join now

The same method has not been followed by the government in this season, because of that a disparity formed in the domestic oil seed prices, which has lead to poor capacity utilization; large accumulation of oilseed stocks and profit margin of oilseed processors deteriorated severely in the new season and many plants are operating at much lower capacity to minimize the losses.

It is very ironical that our own seeds are not being crushed fully and would lead to higher imports of vegetable oils during our peak crushing season. This will also have impact on rabi oilseeds sowing and it is evident from the initial report that acreage under rabi oilseeds crop has diminished.

Indian vegetable oil industry consists of 15,000 oil mills, 600 solvent extraction units, 600 vegetable oil refineries and 250 vanaspati units spread across the country crushing / processing oilseeds, oilcakes, rice bran & processing vegetable oils.

The domestic turn over of the vegetable oil industry is Rs.100, 000 crores and import-export turnover of about Rs.40, 000 crores per annum. To bridge the gap between demand and supply of vegetable oils, country is compelled to import a large quantity of edible oils.

India has become the largest importer of vegetable oils in the world. During November, 2008 to October, 2009 (2008-09) India imported 86.6 lakh tonnes of vegetable oil worth Rs.28,000 crores, a huge burden on exchequer next to crude petroleum products.

The government should nourish the domestic edible oil sector by encouraging diversification of land from food grains to oilseeds, increasing productivity and fullest exploitation of non traditional domestic sources.

This would of course, would improve itself to stand with the international quality and quantity and the capacity utilization and could bring down the rampant price disparity.

With the inputs from SEA data

Post your comment  (0)

Connect:

Post to Twitter

Post to Facebook