Commodities Buzz: India 2010-11 Edible Oil Imports Likely Flat At 8.8 Million Tons.

India's edible oil imports this marketing year are likely to remain unchanged from last year as domestic output will rise enough to meet higher consumption, a senior industry executive said. India imported 8.8 million tons of edible oil in the year ended Oct. 31. The country is the world's largest edible oil importer and meets more than half of its requirements through imports.

The summer-sown oilseeds crop projection is higher. So the 3%-4% increase in [edible oil] demand could be made up by higher domestic oilseeds production, Sushil Goenka, president of the Solvent Extractors' Association of India, said.

According to the Central Organization of Oil Industry and Trade, India's summer-sown oilseeds output in the marketing year that started Oct. 1 is likely to jump 12.4% to 15.4 million tons from 13.7 million tons last year.

In 2009-10, the country's imports climbed to a record as international prices were low and the local crop shrank after the worst drought in nearly four decades. India imports palm oil mainly from Indonesia and Malaysia, and soyoil mostly from Brazil and Argentina.

Sunflower oil imports may be lower [in 2010-11] due to higher prices and increasing price difference between soyoil and sunflower oil, Goenka said. Sunflower usually commands a premium over soyoil, but now the difference has widened to $250-$300 a ton from about $50-$100/ton a year earlier. India imported 630,005 tons of sunflower in 2009-10, while soyoil imports stood at 1.7 million tons.

Goenka added that soyoil imports this marketing year will depend on the price difference with palm oil. The premium of soyoil over palm oil is currently $60-$80/ton.

The Solvent Extractors' Association of India is also seeking the imposition of a 10% import tax on crude edible oil to protect local farmers, Goenka said. India doesn't impose any import tax on crude edible oils, but levies a 7.5% tax on refined edible oils.

Source : indiainfoline.com