INTERVIEW: India Vegoil Imports Likely To Rise In 2010-11 - Executive

By Debiprasad Nayak 
  Of DOW JONES NEWSWIRES 
 
  MUMBAI (Dow Jones)--India's imports of crude vegetable oil is likely to rise
up to 5.6% in the next marketing year as the country will need higher supplies
to feed several new refineries that are being set up, a senior industry
executive said. 
  The world's second-largest vegetable oil importer after China is expected to
import up to 9.5 million metric tons next year starting Nov. 1, compared with
9.0 million tons estimated for this year, Ashok Sethia, president of the Solvent
Extractors' Association of India, told Dow Jones Newswires in a recent
interview. 
  "There are about 12 refineries that are being set up at Krishnapatnam and they
will import both crude palm oil and soyoil," he said. 
  Demand for cooking oil is rising in India, which meets more than half its
vegetable oil requirements through imports. Several companies are setting up
refineries in southern India's Krishnapatnam because of a newly opened port,
which is closer to suppliers Indonesia and Malaysia than ports on the country's
western coast. 
  The country's vegoil imports in August rose 64% from a year earlier to 1.07
million tons--the highest in a single month since 1994--while imports during
November-August were 7.45 million tons, according to the trade body. India
imports palm oil mainly from Indonesia and Malaysia and soyoil mostly from
Brazil and Argentina. 
  Most of the refineries at Krishnapatnam are expected to start operations by
the end of 2011, Setia said. 
  Also, three refineries are expanding capacity near the eastern port of Haldia,
and one or two new refineries are being set up near the country's financial hub
Mumbai and Kandla in western India, Sethia said without elaborating on the total
capacity that will be added. 
  Currently, there are more than 500 edible oil refineries in India with a
combined annual refining capacity of 20 million tons. Companies such as Gokul
Refoils & Solvent Ltd. and Sanwaria Agro Oils Ltd. have earlier said they were
expanding capacities. 
  Sethia said vegoil consumption is increasing at about 2% annually and by 2015
its consumption is expected to rise to 21 million tons from the current 15
million tons. 
  He said soyoil import will continue to rise if the price gap between palm oil
and soyoil narrows. If the difference is $100 a ton, then soyoil imports may be
1.5 million tons, but if it reduces, then imports may rise to 2.0 million tons,
he added. 
  Indian companies had increased their soyoil imports over the past few months
after a decline in the premium over palm oil. India's imports of soyoil, which
normally commands a premium due to its better quality, during November-August
jumped 64% to 1.35 million tons. 
  He said India is unlikely to put any restrictions on vegoil imports due to
high food inflation, which has been in the double digits since November. "Right
now we are not demanding any tax on imports," he added. 
  The trade body had earlier urged the government to impose a 10% import duty on
crude palm oil and increase the duty on refined, bleached and deodorized palm
olein to 17.5% in a bid to control imports and encourage domestic oilseeds
crushing. 
  India currently doesn't impose any import tax on crude edible oils, but levies
a 7.5% tax on refined edible oils. 
 
  -By Debiprasad Nayak, Dow Jones Newswires; 91-22-61456105;
debi.nayak@dowjones.com-By 
 
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  (END) Dow Jones Newswires
  September 23, 2010 02:43 ET (06:43 GMT)


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