Web Sify
Follow us on
Mail
Print

UPDATE 2-India vegoil imports jump to all-time high in January

Source : REUTERS
Last Updated: Thu, Feb 14, 2013 13:00 hrs

* Vegoil imports could reach 11 mln T in 2012/13 -industry

* Malaysia's nil tax pushes India's palm oil imports

* Over three-fifths vegoil demand to be met via imports (Adds details, quotes, background)

By Ratnajyoti Dutta

NEW DELHI, Feb 14 (Reuters) - India's vegetable oil imports soared 27 percent from a month ago to an all-time high in January on purchases of cheap palm oil, a trade body said, raising the prospect for further curbs on cheap imports from Indonesia and Malaysia.

India, the world's top vegetable oil importer, could buy as much as 11 million tonnes in the year to October - well above recent averages of 8-9 million tonnes - if the government does not restrict palm oil imports, the head of the top industry body said on Thursday.

Malaysia, the world's No. 2 producer of palm oil, made exports duty-free from Jan. 1, and Indian buying soared until New Delhi slapped on import duties mid-month to protect local producers.

"Imports could be 10.5-11.0 million tonnes if the current trend of unabated cheap imports continues in the absence of any corrective steps by the government," B.V. Mehta, executive director of the Solvent Extractors' Association, said in an interview.

As India's population grows in size and wealth, demand for cooking oil is rising at about 5 percent a year. Consumption hit 16.7 million tonnes in the marketing year ended Oct. 31 and could rise to as much as 17.5 million tonnes in 2012/13, Mehta said.

New Delhi tries to encourage local production of oilseeds, partly by guaranteeing minimum prices to farmers, but has had limited success. For this year to end-October 2013, imports are likely to meet 63 percent of demand, up from recent averages of about half.

India's vegetable oil imports rose to 1.2 million tonnes last month, with palm oil imports surging 13 percent on the month to a record 893,313 tonnes, the trade body's latest data showed. Palm oil accounts for about 80 percent of total imports.

Trade bodies have been demanding that the import duty on crude edible oil should be raised to 10 percent, while refined oil imports should be taxed at 20 percent, ensuring at least a 10 percent duty differential between the two variants to protect domestic oilseeds growers and refiners.

"A zero export duty regime in Malaysia pushed palm oil imports to a record level," said Sandeep Bajoria, chief executive of the Mumbai-based Sunvin Group, an importer of edible oils.

The record imports could worsen on India's current account deficit, which hit 5.4 percent of gross domestic product (GDP) in the September quarter and, according to some analysts, could reach nearly 8 percent in the December quarter.

India has taken to taxing imports to protect domestic oilseed growers and crushers from aggressive pricing by Malaysia and rival Indonesia, the world's biggest palm oil producer. India also buys a small quantity of soyoil from Argentina and Brazil.

New Delhi applied a 2.5 percent import duty on crude palm oil during the second half of January to try to curb imports.

Traders said palm oil prices were $30 per tonne lower in the first half of last month as a result of Malaysia's decision to remove export duties.

Imported refined palm olein averaged $812 per tonne CIF in December, while delivered CPO price averaged $739 a tonne.

Bajoria said lower crushing of soybeans and expectations of an imminent import duty also supported the record purchases.

Soyoil and sunflower oil imports also jumped last month. The soft oils are preferred during the winter season, when demand for fried foods at wedding feasts surges. Palm oil tends to solidify at lower temperatures.

Soyoil imports rose by nearly five times to 103,033 tonnes last month, while sunflower imports nearly doubled to 130,285 tonnes from the previous month. (Editing by Jo Winterbottom and Jane Baird)




More from Sify:
blog comments powered by Disqus
most popular on facebook
talking point on sify finance