6/10/05 Mumbai , (The Business Line) - VEGETABLE oil imports aggregatedto a high of 45.5 lakh tonnes ( (lt) in the first 11 months of the oilyear 2004-05, up from 38.8 lt during the corresponding period previousyear. The big story is the incredible jump in soyabean oil arrivals pastseveral months. Imports have more than doubled to 17.6 lt from 7.3 ltduring the corresponding period in 2003-04.

September saw vegetable oil arrivals continuing with vigour, but slightlyless voluminous than the previous three to four months. According topreliminary import data made available to Business Line by the industryportal Oilmandi.com, 3.83 lt of various oils arrived last month.

Imports comprised, broadly, 2.10 lt of soyabean oil; 1.49 lt crude palmoil; 15,000 tonnes of crude palmolein, and the rest refined palmolein(6,000 tonnes) and crude palm kernel oil.

October imports are projected between 4.5 lt and 5 lt, taking the annualtotal past the 50-lt mark. The country imported the highest quantity of51.1 lt during 2002-03, a drought year. This year could well match thatrecord, despite the Government claiming higher oilseeds production.

It is ironical that imports are rising, despite the Government designatedprocurement agency Nafed struggling to cope with about 15 lt.

Rapeseed/mustard was purchased several months ago at the minimum supportprice of Rs 1,700 a quintal. How the agency would dispose of the stockremains a mystery; but it is certain that with every passing day the costof the procured material - storage cost, interest - keeps mounting.

With kharif oilseed crop prospects now more or less clear and globalmarket signals pointing to strong vegetable oil prices driven by expandingdemand for biodiesel, the domestic market will have to cope with lowerdomestic raw material for crushing and higher imported oil prices.

Speculation rife over tariff changes: Uncertainties relating to changes intariff values and duty changes continue to distort the market. Tariffchanges, in particular, need more transparency. The Government shouldannounce tariff values at the beginning of every month and revise therates whenever market conditions warrant.

Worse, players outside the country seem to know about Indian tariffchanges ahead of anyone else in the market. In trading centres, such asKuala Lumpur and Singapore, people seem to be almost certain aboutimminent changes in Indian tariffs. Often, they are absolutely right.

Speculators are having a field day in such uncertain conditions resultingfrom wholly avoidable non-transparent way of functioning of theGovernment.

There obviously is some serious lapse somewhere in the system that needsto be investigated.

(1 million = 10 lakh)