Top edible oil buyer India will likely import record volumes of vegetable oils to feed a rapidly growing population in the next marketing year, a trade body said, despite a recent government hike in import duties for the refined grade.
India's total edible oil imports in 2014/2015 are projected to rise to 11 million tonnes, a senior official at the Solvent Extractors Association (SEA) said on Thursday, as food and fuel demands grow with the population.
India's refined palm olein imports alone are projected to climb more than 70 percent to 3.8 million tonnes 2014/15 from the current year, said SEA's executive director B.V. Mehta, speaking at an industry meet in Kuala Lumpur.
Market participants had initially said that New Delhi's decision to raise its import duty on refined edible oils to 10 percent from 7.5 percent could see buyers switching to crude palm oil instead, raising fears that Indian imports of refined edible oils would plummet.
But extra freight charges incurred to import the crude grade of the tropical oil from top producers Indonesia and Malaysia may see investors sticking to refined palm oil imports.
"Who will import crude palm oil when you're getting the refined product at almost the same rate? There's hardly a difference of 5 to 10 dollars," said Mehta at the sidelines of the conference.
India's crude palm oil imports in the 2014/2015 year will likely drop nearly 30 percent to 4.3 million tonnes, he said.
The trade body chief also said that India is not likely to raise the refined oil import duty further for now as it tried to keep food inflation in check before its general elections.
"The government is more cautious and will be reluctant to change the duty structure again, fearing it may lead to food inflation, which is a major issue in India," he said.
Imported palm oil, used to make a variety of products from soaps to cookies, constitutes about 80 percent of India's total annual vegetable oil demand of 17 million-18 million tonnes.India also imports a small quantity of soyoil from South America
Source:- thestar.com.my
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