India’s vegetable oil imports are likely to rise by at least Rs 2,000 crore to Rs 27,000 crore this year (November-October), as traders take advantage of a low-duty regime to pile up “cheaper” products from overseas.
“Considering the arrivals of ships lined up during October 2009, the total import will cross 8.6 million tonnes valued at over Rs 27,000 crore,” Mumbai-based Solvent Extractors’ Association (SEA) President Ashok Sethia said.
The country imported 6.3 million tonnes of vegetable oils worth Rs 25,000 crore in the 2007-08 oil year, which runs from November to October.
“The main reason for the sudden rise in import is low international price, coupled with nominal import duty,” said the association. The country had scrapped customs duty on crude edible oils last year though it had, for some time, imposed a 20 per cent tax on crude soyoil import.
Though the country is expected to purchase more vegetable oils, comprising mostly edible oils, the estimated import bill in excess of Rs 27,000 crore could have shot up to a much higher level had the global prices been ruling at the last year level.
“The import bill surged to Rs 25,000 crore last year due to unprecedented rise in prices in the global market. Since prices have now come down, the rise this year in the value terms is not as dramatic as in the volume terms,” SEA Executive Director B V Mehta said.
Prices of crude palm oils, which account for over 80 per cent of the country’s total edible oil imports, have declined to $685 a tonne this October from $865 in October 2007, according to the SEA data.
Source : Business Standard