India's vegetable oil imports witnessed over two-fold year-on-year increase in April 2009 due to poor oilseeds production, decline in cooking oil prices worldwide and zero import duty structure.

India's vegetable oil imports grew more than two-folds in April 2009, with shipments into the country are projected to reach the record level of 80 Lakh Tonnes during the present oil year to October 2009, as reported by The Hindu.

Solvent Extractors Association of India (SEA) compiled the data from various sources and revealed that the imports of vegetable oil surged to 6.99 Lakh Tonnes in April 2009 from 3.47 Lakh Tonnes in April 2008. From this, 6.59 Lakh Tonnes was edible oil and the rest was non-edible oil. RBD Palmolein imports displayed a rising trend for April 2009 at 1.03 Lakh Tonnes, a ten-fold growth over April 2008.

SEAI held the poor production of oilseeds in the country largely responsible for such a robust increase in vegetable oil imports. Moreover, the increase in domestic oil demand, fall in the prices of cooking oil worldwide and zero import duty on crude edible oil bolstered the vegetable oil imports in India.

Although the oil seed crop estimates have been revised by the Indian government for the current season, imports are still flooding into the country. In fact, India is heavily dependent on imports for meeting nearly half of its edible oil demand.

Despite rapidly increasing imports, the stocks of oil at the ports are much below than expected and can probably last for nearly a month.

Industry experts don't look confident about the oilseed estimates revised by the Agriculture Ministry of India. According to an industry player, sharp growth in oil imports indicates that the production is still low and so this calls for the Ministry to revise the crop estimates for a final time.

According to a Research Analyst at RNCOS, "Refined oil is the most rapidly growing segment of India's total vegetable oil imports. This clearly indicates that the zero duty import structure may not continue for longer period of time. In fact, heavy imports of refined oil suggest that the country's crushing mills, which are already affected from poor crop production, would suffer further."

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