Edible oil import may rise in coming year

India’s dependence on imported edible oil is likely to increase to record level during the coming oil year of 2017-18 (November-October). A decline in availability from domestic sources is expected, following lower oilseed availability and sustained increase in consumption.

Five years ago, share of import in total consumption was 55 per cent, which has now reached 70 per cent, and was estimated to go up further to 74 per cent next year.

Data compiled by the apex industry body, the Solvent Extractors’ Association, shows vegetable oil (98 per cent edible and two per cent non-edible) import at 14.27 million tonnes for the 11-month period ended September 2017, compared with 13.57 mt in the corresponding period last year. Another 1.2-1.3 mt of import in October would take the year’s import to 15.5 mt, a record.

As for oil year 2017-18, less of sowing and crop damage due to flooding in major growing regions has reduced the soybean crop size. From last year’s 12 mt, soybean output is forecast at below nine mt.

“With four per cent increase in per capita consumption to add around 0.8 mt of demand every year, and the lower acreage, dependence on imported edible oil would increase,” said Atul Chaturvedi, chief executive at Adani Agro Business and senior vice-president at Adani Wilmar.

For much of 2016-17, oilseed prices remained below the government's minimum support price and farmers held on to stock. They began selling, especially of soybean, after the government's decision to raise import duty on edible oils in August, to 25 per cent from 15 per cent for refined oil and to 15 per cent from 7.5 per cent on crude oil.

Rajkot-based GGN Research estimates India's domestic vegetable oil production at nearly nine mt for 2016-17, against consumption of 21.75 mt. Import in FY17 was estimated at 15.2 mt. Gobindbhai Patel, managing partner of GGN Research, forecasts edible oil import at 16.8 mt for 2017-18, with consumption at 22.8 mt. That would push dependence on imported edible oil to 74 per cent, from 70 per cent the previous year.