India’s edible oil output to hit all-time high of 7.7 mn tonnes in 2017-18.
GGN International forecasts total edible oil production in the country at 7.66 million tonnes for the oil year (November–October) 2017-18, compared to 7.05 million tonnes in the previous year. With an increase in opening stock of a record 2.42 million tonnes, India’s edible oil availability from domestic sources is estimated at an all-time high of over 10 million tonnes. Indian edible oil importers have strategically built a massive inventory on decline in crude palm oil (CPO) prices in the past few months. With a total opening stock of 1.92 million tonnes, India’s total edible oil availability was reported at 8.97 million tonnes in the oil year 2016-17.
The recent increase in the import duty on edible oils is insufficient and the government may soon raise the duty again to protect the interests of farmers. The government, on Aug 11, raised the import duty on crude palm oil to 15% from 7.5%, and that on crude soyoil to 17.5% from 12.5%. The import duty on refined palm oil was raised to 25% from 15%. The new structure increased the difference in duty between crude and refined palm oil to 10 percentage points from 7.5. Import duties were increased to stem the fall in local soybean prices that had dropped below the minimum support price, and were weighing on mustard prices as well. Despite the increase in import duties, soybean prices were still low, and there was a strong case for a further hike in import duty.
The stock of edible oils expected to arrive at various ports in India as of Sep 1 was at 1.59 million tonne, unchanged on month. As of Sep 1, India had 907,000 tonne of edible oil in stock at ports, compared with 883,000 tonne a month ago. India’s monthly requirement is around 1.75 million tonne. However, it currently holds over 2.49 million tonne, or a 43-day stock.
India edible oil imports rose 7.2% on year to 1.34 million tonne in August. During Nov-Aug, the country imported 12.44 million tonne of edible oil, higher than 12.04 million tonne a year ago. In August, overall imports of vegetable oils–comprising edible and non-edible oil–were at 1.36 million tonne, against 1.26 million tonne a year ago.
The Food Safety and Standards Authority of India is looking at reducing the permissible limit for trans fat in edible oils and spreads to 2% from 5%. The regulator had in 2015 lowered the permissible limit for trans fat in edible oils to 5% from 10%, and given edible oil processors time till Feb 27 this year to comply with the norm. Health experts, however, have been seeking zero tolerance for trans fat in edible oils and spreads, as it is linked to higher risk of heart disease. Many countries allow only up to 2% trans fat in food products. The general thinking is that trans fat below 5% is safe.
The Army Purchase Organization has invited bids to buy 6,000 tonne of edible oil through NCDEX e-markets on Sep 12. In another tender, NCDEX e-markets auctioned 25 tonne soybean in Madhya Pradesh at 2,952 rupees per 100 kg against the base price of 2,950 rupees.
Edible oil prices softened by Rs 50 per quintal at the wholesale oils and oilseeds market on easing demand from retailers. However, non-edible oils remained steady in thin trade. fall in demand from retailers against sufficient stocks position mainly led to decline in edible oil prices.
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