Plentiful kharif oilseeds crop helps cut imports
India’s monthly requirement is about 1.65 million tonnes and it operates at 30-day stock
The trend in imported edible oil prices indicates a further spiral in the coming months, provided India is able to produce more than enough mustard to increase the availability. The irony is, while imported edible oils are on the boil; farmers are struggling to sell their soybean crops even at the minimum support price.
The average CIF (cost insurance and freight) price of RBD palmolein at the Indian port was $773 a tonne in December, up 36.3 per cent from $567 in the year-ago period. The imported crude palm oil (CPO) CIF was averaging $772 per tonne last month against $538 per tonne in the corresponding period of previous year.
Similarly, imported crude soybean oil was averaging $887 per tonne in December, up 17.3 per cent from $756 per tonne year ago. But crude sunflower oil CIF was $836 per tonne, down from $872/ tonne year-on-year, according to data with the Mumbai-based Solvent Extractors Association of India (SEA).
Since April 2016, landed price of RBD palmolein and CPO have remained more or less the same, encouraging larger import of RBD palmolein at the cost of CPO, said BV Mehta, SEA executive director. The spread between palm oil and soft oil (soybean and sunflower oils) also reduced encouraging larger import of soft oils, he said. “Importers continue to make larger purchases of sunflower oil, taking advantage of the still large price discount compared with soya oil,” Mehta said.
On the other hand, soybean in Indore, the main trading hub of the oilseed, is selling at Rs 2,900 a quintal and in other places like Shivpuri below Rs 2,700 a quintal. Even in Indore, farmers sold soybean at Rs 2,600-2,700 a quintal in mid-November, according to official data.
The government had increased the minimum support prices of all kharif and rabi oilseeds. The groundnut MSP for 2016-17 (July-June) crop year was raised to Rs 4,220 a quintal (including Rs 100 bonus) from Rs 4,030 a quintal, the soybean MSP to Rs 2,775 a quintal (including Rs 100 bonus) from Rs 2,600 a quintal and sunflower MSP to Rs 3,950 a quintal (including Rs 100 bonus) from Rs 3,800 a quintal.
The stock of edible oils as on January 1, 2017 at various ports is estimated at 695,000 tonnes, that includes CPO 240,000 tonnes, RBD palmolein 145,000 tonnes, degummed soybean oil 210,000 tonnes, crude sunflower oil 90,000 tonnes and canola oil 10,000 tonnes. About 1,150,000 tonnes are in pipelines and scheduled to arrive in one-two months. Total stock at ports and in pipelines marginally increased to 1,845,000 tonnes as on January 1 from 1,825,000 tonnes on December 1, 2016.
India’s monthly requirement is about 1.65 million tonnes and operate at 30-day stock against which currently holding stock is over 1.845 million tonnes that equals 34 days of requirements, Mehta said.
Palm oil imports fell for the second consecutive month by 8.5 per cent to 723,158 tonnes in December, on expected bumper oilseeds crop and better domestic supply, SEA said last week. India, the world’s second largest vegetable oil importer after China, had imported 790,368 tonnes palm oil in December 2015.
India’s total vegetable oil imports fell by 15 per cent to 1.209 million tonnes in December, from 1.420 million tonnes in the year-ago period.
“Import has reduced due to good kharif oilseeds crop and thus better domestic availability of edible oils. Reduction in purchases by the end-consumer due to currency crunch also affected the demand and import to some extent,” SEA said in a statement.
Palm oil makes up over 65 per cent of the country's total vegetable oil imports. But there has been a sharp increase in the import of refined palm oil due to less price difference with crude palm oil (CPO). Among palm oil products, import of RBD palmolein rose by six per cent to 245,554 tonnes in December from 231,810 tonnes in the year-ago period.
The shipments of CPO, however, dropped by 14 per cent to 473,179 tonnes in December from 551,058 tonnes in the year-ago period, and the import of crude palm kernel oil (CPKO) declined to 4,425 tonnes from 7,500 tonnes in the said period.
Among soft oils, import of soybean oil declined to 232,132 tonnes in December from 490,718 tonnes in the year-ago period, while sunflower oil and rapeseed oil shipments stood at 185,824 tonnes and 33,182 tonnes, respectively, in the said period.
India imports palm oil from Indonesia and Malaysia, soybean oil from Argentina, Brazil and the US, and sunflower oil from Ukraine and Russia.
Source:- Mydigitalfc.com
