KOLKATA: India’s forex outgo on account of import of vegetable oils has zoomed to a record high of Rs 28,000 crore in the just concluded oil year of 2008-09 (November-October) from Rs 25,000 crore in the previous year.
Apart from a normal 7% growth in consumption of cooking oils, which constitute 95% of the total vegetable oil imports, zero import duty on crude edible oils and a nominal 7.5% duty on refined palmolein have triggered the jump in the import bill.
The country has to foot the bill for importing 8.66 million tonne (mt) of vegetable oils
in 2008-09, which is 37% higher than the previous year. In terms of edible oils, according to the Solvent Extractors’ Association of India (SEA), the hike was 46% with its net import soaring to 8.18 mt in the year.
Cooking oil import was fuelled by rising demand, which, among other things, has got a boost from several welfare schemes including mid-day meals in schools, distribution of cooking oils at subsidised rates to BPL families through ration shops and the recently launched employment generating scheme, NREGA, in rural areas, a SEA official said.
In addition, a 5% depreciation in the dollar rate against the rupee value over the past few months and softening of the cooking oil prices in the global market for a better part of 2008-09 have also encouraged its import, he added. Predictably, the growth in imports has been led by crude palm oil (CPO). Riding on a zero import duty, nearly 5.2 mt of crude palm oil entered India in 2008-09 against 4 mt a year ago.
With price differential between soyabean oil and sunflowerseed oil narrowing down during early 2009, import of sunflowerseed oil rose to a record high of 0.6 mt in the year as against just 26,490 tonne of imports in 2007-08. Soybean oil imports has increased to 0.99 mt from 0.76 mt.
The ballooning of imports is not only threatening oilseed security, it has also started taking its toll on the domestic oilseed processing industry. Faced with negative growth in oilseeds cultivation, which, among other things, has been induced by burgeoning cooking oil imports, many processing/extraction plants are operating at much lower capacity to minimise their losses, the official said.
However, responding to the low demand from the soap industry, import of non-edible oils, which form a part of the total vegetable oils basket, fell 29% to 0.46 mt in 2008-09 on a y-o-y basis.
Source : The Economic Times