EDIBLE OIL

INTRODUCTION

India is the world's leading importer and consumer of edible oils in the world. Of the total 5.0-5.5 million tons of vegetable oils imported by India annually, 1.3-1.5 million tons is soyabean oil, imported mostly form Argentina, Brazil and US , nearly 3 million tons of palm oil is purchased from Malaysia and Indonesia.

WORLD SCENE

While US has a strong domestic consumption base and mostly exports soyabean in addition to oil, Argentina and Brazil exports much of their production, mostly in the form of crude oil. China and India, though being producers themselves, import soyabean/its derivatives to cater to their expanding consumer base. While China imports both bean and oil, India allows only imports of oil.

Crude Palm Oil (CPO), Crude Palmolein, RBD (refined, bleached, deodorized) Palm Oil, RBD Palmolein and Crude Palm Kernel Oil (CPKO), Crude Soya Oil and Refined Soya Oil are the various edible forms of oil traded.

Production of Palm Oil stands at 23-24 million tons (over 20% of the global vegetable oil), with Malaysia and Indonesia producing the lion's share – 11 to 12 and 8 to 9 million tons respectively. While the production has been growing at the rate of 7%, the consumption has been growing slightly faster at 7.15%

Soyabean Oil is the leading vegetable oil traded in the international markets, next only to palm. Palm and Soyabean oils together constitute around 68% global edible oil trade volume, with soyabean oil constituting 22.85%.

INDIAN SCENE

Palm oil imported into India is used in various forms- consumed directly as 'palm oil' after refining, used in the manufacture of Vanaspati, for blending with other vegetable oil, crude oil and kernel oil for industrial purposes, etc. It is imported mainly through the ports of Kandla, Kolkata, Mangalore, Mundra, Mumbai, Chennai, Kakinada, Cochin.

With the population growing from about 550 million in 1970 to over 1 billion in 2001, and per capita income growth rising throughout the 1970s (1.4 percent annually), 1980s (3.1 percent) and 1990s (3.7 percent), consumption growth in India has increased sharply. By1999/2000-2001/02, per capita oil consumption had climbed to an annual average of 10.2 kilos well above the 4.0 kilos per person India averaged in the early 1970s.

Consumption trends in India are marked not just by rising overall consumption, but by changing patterns of consumption as well. Reflecting traditional patterns of domestic oilseed production, for example, almost all vegetable oil consumed in India in the early 1970s was peanut oil (53 percent of consumption in 1972/73-1974/75), rapeseed oil (25 percent), and cottonseed oil (9 percent). Palm, soyabean and sunflower oil together accounted for less than 4 percent of the total. More recently, though, palm and soyabean oil account for 38 and 21 percent of total consumption respectively, in 1999/2000-2001/02.

Edible oil imports were placed under the OGL system in 1994, private traders were permitted to import any quantity of vegetable oils, subject only to a tariff. The tariff was initially set at 65 percent on all edible oils—still relatively high, but significantly below the implied tariff when imports were under quantitative controls. Under the Uruguay Round Agreement on Agriculture (part of the agreement establishing the WTO) India also agreed to bound (maximum) tariffs of 45 percent for crude or refined soyabean oil imports. Tariffs on all other edible oil imports were bound at 300 percent, except refined rapeseed oil and crude sunflower-safflower oils, which were subject to over-quota.

PEC’S ACTIVITIES

PEC has been mainly importing RBD Palmolein, Crude Palm Oil, Crude Degummed Soyabean Oil, etc. PEC’s annual turnover of Edible Oil for the year 2002-2003 was approx 50,000 MT. The import of various types of Edible Oils are done after taking stock of the demand and consumption pattern in India. PEC has been active on all the major ports i.e. Kandla, Mumbai, Kolkata, Cochin, Kakinada, Mangalore. The oil imported is being sold in the domestic market to the processors, traders and other users in bulk.

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