India to Import More Edible Oil at Higher Price in ’10-11.

India’s domestic edible oil industry is slowly moving towards a phase of growing import dependency amid stagnant domestic oilseed production and rising consumption. In a interview with FE’s Sanjeeb Mukherjee, Pranav Adani, managing director of Adani Wilmar, India’s biggest seller of packaged edible oils by volume, throws light on issues related to the industry and his expansion plans. Excerpts:

India’s edible oil industry is going through a critical phase with imports rising. However, domestic production hasn’t shown a tangible increase in the last few years. We are now importing almost 10 million tonne of edible oils annually, which was 4-6 million tonne a few years back. How do you see the level of imports in coming years and also the reasons for the same?

Yes, driven by widening demand-supply mismatch, India’s edible oil imports have more than doubled in previous four years to over 8.8 million tonne in 2010-11 oil year. The import should be growing at 6-7% per annum. The level of import can go up to 12 million tonne by 2015. The rise in imports is led by a galloping increase in demand for edible oils and a near stagnant oilseeds production in the last decade due to minimal growth in acreage. One more important factor for amplified import dependency could be India’s oilseed crop is cultivated at under irrigated areas which often lead to lower oilseed productivity than the global average.

The mix in India’s edible oil imports in the last few years has largely been in favour of palm oil, but with palm prices expected to rise in coming months, do you see this mix changing in favour of soyaoil in 2010-11 oil marketing year. What could be the proportion of soyaoil and palm oil imports in 2010-11.

Internationally, palm oil has always been a very big segment and recent three-four years’ trend has resulted in palm oil becoming a very huge category in India as well. The increase in palm prices will not significantly hamper quantity of imports. However, in case of soyaoil, though the popularity is on rise, the proportion of imports would be in the same ratio.

Source : financialexpress.com