20/02/2008 (Commodity Online), New Delhi - The vegetable oil scene in the country is unlikely to improve with the industry predicting that India’s vegetable oil imports are bound to go up this year by around 7 per cent.

According to Solvent Extractors’ Association of India, it is due to lower carry forward stock of oilseed and rising oil consumption.

Last year, the country had 3.5 million tonnes of mustard seed carry forward stock, while at the start of the current oil year in October, it was left with only 150,000 tonnes.

India’s import ratio of palm oil and soyoil in the current oil year is likely to be 80:20, from 67:33 a year ago, on account of high prices of soyoil and a sharp rise in freight duty.

The country imports nearly 50 per cent of its annual edible oil needs of close to 10 million tonnes in the form of palm oil from Malaysia and Indonesia, and soft oils like soyoil from South America.

In 2007-08, oilseeds production in India is estimated at 25-26 million tonnes compared with 24 million tonnes last year.
However, total availability of oilseeds this year will be lower due to a sharp decline in carry over stock.

Also, rabi output is expected to fall below 9 million tonnes this year, from 9.5 million tonnes achieved in the previous year, mainly due to lower mustard seed crop.

Mustard seed output is seen lower this season due to unfavourable cold wave and ground frost conditions in northern India, and 11 per cent decline in acreage.

Mustard seed output this season is likely to be around 5-5.5 million tonnes, down from 6.2 million tonnes a year ago.

Following crop lose in Rajasthan, the state government this week announced an Rs 126 crore relief package for farmers whose crops were damaged by frost and extreme cold weather. Rajasthan contributes 35-40 per cent of India’s total mustard output.

According to market analysts, the government may reduce import duty on edible oils by 10-15 per cent in the coming Union Budget.