India’s edible oil imports are set to fall in 2017/18 as a bumper crop of oilseeds are carried forward and will boost domestic edible oil production in the year ahead, a leading industry analyst and trade expert said on Wednesday.
A drop in imports next year would be the first in seven years, although in July the view was that India’s higher oilseed output and crushing would lead to a fall in the current year.
Instead, farmers were reluctant to sell this year’s bumper oilseed output at low prices and stocks will be carried forward to be crushed next year, said managing director of trading firm G.G. Patel & Nikhil Research Company, Govindbhai Patel.
Lower purchases by the world’s biggest importer of vegetable oils could put pressure next year on soyoil and palm oil prices, which have surged over the last few months.
India is expected to import 15.13 million tonnes of edible oils in the year starting on November 1, down 70,000 tonnes from the current year, Patel told an industry conference on Wednesday.
India’s edible oil purchases—mainly palm oil from Malaysia and Indonesia and soybean oil from Argentina and Brazil—have increased each year since 2010/11, according to the Mumbai-based Solvent Extractors Association of India (SEA).
The country’s edible oil imports in the year to October 31 are now expected to rise 4.3 per cent from a year ago to 15.2 million tonnes, Patel said, after earlier being expected to fall.
That means India is likely to start the new marketing year with carry forward stocks of 1.16 million tonnes of soybeans compared to just 460,000 tonnes a year ago, Patel said.
The country’s soybean production in 2017/18 is expected to fall 15.2 per cent from a year ago to 8.9 million tonnes due to a reduction in planting and lower rainfall in key growing regions, he also said.
Still, with the carry forward stocks, domestic output of edible oils is expected to rise 8.7 per cent to 7.66 million tonnes in the next season.
Palm oil accounts for more than half of India’s total edible oil imports. Its purchases are likely to edge lower to 9.13 million tonnes in 2017/18, compared with 9.28 million tonnes in the current year, Patel said.
Imports of sunflower oil—perceived to be a healthier option by many Indians—could surge 8 per cent to 2.3 million tonnes next year, while soyoil imports could remain largely steady around 3.5 million tonnes, he said.