New Delhi: India, the world’s biggest buyer of vegetable oilsafter China, may import more cooking oil in the year starting November as dry weather reduced monsoon sowing of peanuts, sunflower and sesame seeds.
Purchases may go up by at least 500,000 tonnes from 5.1 million tonnes (mt) this crop year ending 31 October, said Govindlal G. Patel, director of Dipak Enterprises. Patel, 69, has been trading the commodity for more than four decades.
Dry spell: A file photo of a farmer inspecting his sunflower crop on the outskirts of Amritsar, Punjab. Narinder Nanu / AFP
India imports more than 85% of the edible oil it consumes in the form of palm oil. Prices of palm oil have tumbled 44% from a March record of 4,486 ringgit (Rs58,184) a tonne, cutting import costs for the nation that’s battling the fastest inflation in 16 years. “It will be cheaper for the government to buy palm oil,” said Harish Galipelli, head of research at Karvy Comtrade Ltd from Hyderabad. “The government will increase its imports as inflation is the main concern now.”
Spiralling food prices have caused Prime Minister Manmohan Singh’s Congress party to lose ground in nine of 11 state polls since January 2007. Singh faces elections in six more states this year and a national election by May 2009.
Farmers planted peanuts on 5.03 million hectares (ha), 2.3% less from a year ago as of 28 August, the agriculture ministry said. The area for sunflower seeds fell by 30% to 495,000 ha, and for sesame by 9% to 1.36 million ha. The seeds yield more oil when crushed than soya beans.
“Even if there’s an increase in oilseed production, the oil availability will be less as most of the increase in area is in seeds that bear less oil,” Patel said over the phone from Rajkot in Gujarat. Most of the imports, which have also increased because of lower mustard seed output, will arrive between November and February, he said.
Production of monsoon-sown oilseeds, which make up more than 60% of the total, may climb 4% to 17.5mt in the year ending June 2009, Patel said. India probably harvested 19.84mt the previous year, the government said in July. The monsoon crop is sown in June and harvested this month.
Edible oil imports rose 10% to 3.63mt in the nine months ended July from 3.3mt in the year-ago period, according to the Solvent Extractors’ Association of India. Palm oil made up 88% of total purchases.
Rains have been below average since the monsoon season began on 1 June in Karnataka, India’s largest producer of sunflower, and in Gujarat, the biggest peanut grower, according to the weather office. Falls in Maharashtra, the second-biggest soya bean grower, have been less than normal.
“We need two more spells of rains in Gujarat,” Patel said. “If rains come, the peanut crop will be about 2mt in the state and if they don’t, output will be 1.5mt.”
India, which relies on overseas purchases to meet almost half its edible oil demand, in March scrapped the import tax on crude soya bean and palm oils, and cut the levy on refined edible oil, to bolster domestic supplies. The government banned futures trading in soya bean oils in May to rein in prices of the commodity.