Imported Edible Oil to Get Costly: Trade.

Mumbai: Increased consumption of edible oils by India would henceforth be coming at higher prices, because of the structural deficit in global edible oil supplies, putting an added pressure on the already high food inflation.

Renowned domestic and international edible oil experts at the two-day annual ‘Globoil India’ conference, were of the opinion that higher Indian imports would have to come naturally from palm oil given the fact that soybean oil would be under pressure due to erratic weather in South America and increased demand for soybean from China.

“With rapeseed oil and sunflower oil showing very little growth due to various factors, India would naturally import larger volumes of palm oil, which would come at higher price given the supply-demand position in the two countries of Malaysia and Indonesia,” experts said.

Dorab Mistry, who heads the trading arm of Godrej International Ltd and known worldwide for his authentic price forecasts of the global edible oil industry was of the opinion that palm oil prices would be bullish in the medium-term after easing a bit in the near-term.

“Palm oil prices would move sideways with a lower bias in the next 3-4 weeks and it would be bullish after January due to lower stocks in the pipeline,” Mistry said at the conclusion of the two-day conference.

While he expects global edible oil supplies to increase by 3.8 million tonne in 2010-11 oil marketing year that starts from November, the global demand for edible oil from food segment is likely to come down by 1 million tonne due to the relatively higher price.

“More than one –third of the world population are price sensitive in the case of edible oil and demand would increase by an additional 3 million tonne against the normal increase of 4 million tonne,’ he added.

Demand from bio-fuel industry would also create pressure on meagre oil supplies which would then eat into existing stocks, Mistry said.

According to Mistry, India’s domestic oilseed production has become irrelevant in the global context due to the small volumes.

“India would import 0. 3 million tonne (9.3 million tonne as against 9 million tonne during 2009-10) more edible oil in 2010-11 to satisfy the growing appetite for edible oil, of which palm oil will garner the major share because of its relative large difference with soybean oil,” he added.

Govindbhai G Patel, also an expert in edible oil...

Source : financialexpress.com