Huge inventory, coupled with continuation of zero duty on edible oil imports, has led to a decline in the imports of the commodity in January this year After recording a surge in the beginning of the oil marketing year during the period November-December 2009, edible oil imports in India have witnessed a 3.38% dip in January this year. According to a poll conducted by FoodProcessing360, a whopping 100% of the respondents were of the opinion that India’s edible oil imports have indeed witnessed a fall in 2010.
According to the Mumbai-based Solvent Extractors Association (SEA), the country’s edible oil imports witnessed a dip from 8.56 lt in January 2009 to 8.27 lt in the same period this year.
“Low prices of edible oil in global markets such as Malaysia and Indonesia had encouraged domestic edible oil manufacturers to purchase the commodity in huge quantities,” says Dipen Ghosh, manager of Balaji Overseas Corporation, a small-sized oil seed exporter in Kolkata. As a result, India’s total edible oil imports during the last oil marketing season rose to 81.83 lakh tonnes (lt).
 Reasons for decline in edible oil imports
“The current drop witnessed in edible oil imports could be due to the huge inventory that had been built over the past 1 year,” says Anand Kadia, director of Tamil Nadu Edible Oils Private Limited, a small-sized edible oil manufacturer in Chennai.
It should be noted that the country’s edible oil inventory was facilitated by the rise in the import of the commodity, thereby catering to the estimated requirement for 2008-09, which stood at 130-140 lt. Of this, around 70-75 lt of edible oil was manufactured by the domestic market. Therefore, with half the requirement for edible oil being covered by the domestic market, domestic manufacturers of the commodity have chosen to lessen imports this year.
Moreover, after realising that zero duty on edible oil imports is likely to remain unaltered this year, domestic manufacturers are now looking to purchase the commodity in the latter half of 2010, which has brought about a decline in its import. Sabrina Mitchell |
