NEW DELHI: India may import 25% less edible oil next season despite drought as excessive purchase from overseas this season would more than offset any deficit in output though the prices are unlikely to cool down.
Despite a likely decline in oilseed production in 2009-10 edible oil imports are forecast down to six million tonnes due to larger than normal carry-over stocks said a report by the United States department of agriculture (USDA).
India the largest edible oil importer after China is expected to purchase a whopping eight million tonnes of edible oil this season November-October taking advantage of a zero import duty regime and lower global prices.
Anticipating a decline in the kharif oilseed production and relatively lower prices for edible oils in the international market private traders have been taking advantage of zero import duty to import huge quantities of vegetable oils in the recent months, thereport said.
However, an industry official said prices may not come down despite huge stocks as fears persist about slump in oilseed production due to poor monsoon. The government scrapped import duty on crude edible oil in April last year to contain the price rise as over 40% of its annual domestic consumption of over 12.5 million tonnes is met through import.
Edible oil import by the country has already gone up by about 66% to nearly 6.1 million tonnes so far this season amid indications that the overseas purchase would continue its robust march mainly after drought dented prospects of summer-sown oilseed crops.
India produced 28.15 million tonnes of oilseeds in 2008-09. But with areas under groundnut a major oilseed crop declining by close to ten lakh hectares, experts say a replication of the last year’s production seems improbable as of now.
Edible oil import by the country has already gone up by about 66% to nearly 6.1 million tonnes so far this season amid indications that the overseas purchase would continue its robust march mainly after drought dented prospects of summer-sown oilseed crops.
Source : The Economic Times