NEW DELHI: Edible oil prices are likely to remain tempered in the long term on the back of higher imports.
With apprehensions mounting over poor monsoons and the lower oilseed area coverage up to now this kharif season—mainly in Gujarat, Maharashtra and MP and in peninsular India—there is reason to believe that imports will continue to gather momentum up to the end of the marketing season notwithstanding higher prices globally. For instance, in the April-May period, imports went up manifold though global prices reportedly increased by $48 for RBD palmolein, $70 for crude palm oil, $57 for crude soyabean oil and $45 for sunflower oil. The edible oil marketing year runs from November to October.
A record import of 75 lakh tonnes is projected in the current oil year by the trade fora, most of it made up by the palm group of oils. A record 63 lt of vegetable oils were imported last season. It is this record level that is expected to keep the prices tempered for consumers.
India’s edible oil imports during May alone rose to 6,96,625 metric tonnes, up by a whopping 130% from only 3,02,345 metric tonnes during the same period a year ago, according to the Solvent Extractors’ Association of India(SEAI). While overall oil imports totalled 7.51 lakh tonnes (lt) in May against 3.61 lt during the same period a year ago and 6.99 lt in April this year, edible oils made up the bulk of 6.96 lt in the total. Non-edible oil for industrial use comprised the rest.
Refined soyabean oil is currently trading at a retail price of Rs 20/kg while the futures price for July delivery on the NCDEX and MCX reigns around Rs 10/kg. Although there is trading activity currently, it is range-bound and subdued, according to commodity experts. “The subdued trading activity for refined soyaoil too is on account of lacklustre demand (compared to the high imports, there has been an increase in domestic consumption of edible oil over the last 2-3 years) for the short term.
For the long term, however, prices are likely to remain toned down on higher imports of edible oil and lower demand at the retail end, according to analysts at Angel Commodities. Parastatals such as the MMTC have issued a tender to import edible oil. 12,000 tonnes of RBD palmolein are to be imported by the corporation.
Source : The Economic Times