17/3/07 (Myiris.com) - Edible oil imports declined to a nine-year low in February with domestic stocks of rapeseed and cottonseed helping to save outflow of foreign exchange towards the purchase of oils.

According to figures compiled by the Solvent Extractors Association of India, imports slid to 150,000 tons against 269,000 tons during the year-ago period, a fall of 44%. However, for the first four months of the current oil year starting November, imports increased 4% to 1.08 million tonnes with December and January witnessing heavy inflow.

Edible oil imports this season are expected to top 6 million tonnes in view of a fall in oilseeds production. As per the first trade estimate of the central organisation for oil industry and trade (COOIT), production of nine major oilseeds this season is expected to be down by 2 million tons at 21.98 million tons compared with last year. While kharif crop has been estimated lower 900,000 tonnes at 12.84 million tonnes, rabi output is expected to be down by over 1.1 million tons at 9.14 million tons.

The National Agricultural Cooperative Marketing Federation has been holding rapeseed stocks procured as part of the centre`s market intervention operation for the last 20 months and this has come handy now.
Rapeseed production last season has been estimated at a record 6.77 million tonnes, but this time it is seen down on lower coverage with farmers shifting to other cash crops such as pulses.

Cottonseed availability, on the other hand, is seen more in view of a record cotton crop of 27 million bales. In view of this, cottonseed availability is seen up 500,000 tons at 8.94 million tons. After 1.5 million tons are retained for re-sowing, marketable surplus has been projected at nearly 7.5 million tonnes. Given the fact that cottonseed yields 11 % oil, the edible oil availability is put at around 820,000 tons.

The other important feature of imports has been rise in the inflow of palm oil`s share compared with soft oils such as soyabean and sunflower. Palm oil`s share has increased to 79% during the first four months compared with 58% during the same period a year ago.

The centre had cut the duty on edible oil by 10 percentage points in August last to tame inflation. During the current budget, the finance minister, P. Chidambaram, scrapped the special additional duty on edible oil imports. Crude palm oil now attracts a net customs duty of 61.8%, while for degummed soyabean oil it is 45%.

Edible oil is among items for which a considerable amount of foreign exchange is spent. During 2005-08, Rs 87.10 million was spent on edible oil imports compared with Rs 110.66 billion the previous year. For the current fiscal, a sum of Rs 75.58 billion has been spent till December.