By Thomas Kutty Abraham
March 18 (Bloomberg) -- India, the world's second-biggest buyer of
vegetable oils, banned exports of all edible oils to boost local
supplies amid concern a smaller winter oilseed crop may worsen a shortage.
The one-year restriction is effective from yesterday, the directorate
general of foreign trade said on its Web site today. Edible oil
shipments from the South Asian nation comprise mostly groundnut oil and
coconut oil to the U.S., Europe and China.
India cut the levy on vegetable oil imports four times last year to the
lowest since at least 2000, joining China, Malaysia and Thailand in
securing food supplies. Prime Minister Manmohan Singh's government has
curbed exports of rice and wheat, capped retail fuel prices and banned
some commodities trading to curb inflation before general elections in
May 2009.
``Ban on exports is another step to ensure that local prices of edible
oils don't flare up,'' B.V. Mehta, executive director at the Solvent
Extractors' Association, said in a phone interview in Mumbai.
``Government could take more steps such as reducing import duties or
banning futures trade in oilseeds.''
Finance Minister Palaniappan Chidambaram yesterday said the government
would take steps to curb food prices that have driven up inflation to a
nine-month high.
The South Asian nation relies on imports to meet half its edible oil
needs. It buys palm oil from Indonesia and Malaysia, and soybean oil
from Argentina and Brazil. Palm oil and soybean oil prices reached
record this month on demand for food and fuels.
The country exported 30,000 tons of groundnut oil in the
November-February period, according to the Solvent Extractors'
Association. It didn't export the commodity last year.
`Panic Mode'
Soybeans, soybean oil and mustard oilseed prices fell on the National
Commodity & Derivatives Exchange in Mumbai today. Prices of soybean oil
for April delivery declined as much as 3.9 percent, while mustard
oilseed for May delivery dropped 4 percent.
``The market is clearly in a panic mode. Nobody is sure about what step
the government could take next,'' Mehta said.
India's edible oil imports tripled to 430,992 metric tons in February
from a year ago amid expectation of a surge in domestic demand as winter
oilseed crop is forecast to drop on bad weather.
Winter-sown oilseeds harvest may decline to 8.6 million tons from 9.52
million tons a year earlier, Mehta said March 3. Output of mustard
seeds, the nation's biggest winter-sown oilseed crop, may fall 15
percent to 5.09 million tons this year, he said.
To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at
tabraham4@bloomberg.net
Last Updated: March 18, 2008 03:19 EDT
Source:
http://www.bloomberg.com/apps/news?pid=20601091&sid=aNNsaNIYiX7g&refer=india
From: Business Standard
Govt bans export of edible oil for one year
BS Reporter / New Delhi March 18, 2008
The government has banned export of edible oil for one year to check
rising domestic prices and control inflation. The ban will be in place
till March 16, 2009.
The government had banned export of sugar, wheat, pulses and skimmed
milk powder in an effort to control inflation. It has also regulated
exports of rice and onion.
Edible oil has a weightage of 2.76% in the wholesale price index (WPI) -
higher than cement (1.73%), wheat (1.38%) and rice (2.45%).
"The ban will not have a major impact on edible oil as exports
constitute a small per cent of the entire trade. There was no point in
banning export of groundnut oil, which is a premium oil and where the
realisation is significantly high. The industry could have substituted
such export by importing higher quantities of soya oil or palm oil from
the export earnings," said Davish Jain, chairman, Central Organisation
for Oil Industry and Trade.
India exported 11,639 tonne edible oil in 2006-07. India primarily
exports small quantities of groundnut oil, mustard oil and coconut oil.
In a notification dated March 17, the Directorate General of Foreign
Trade said the ban will also cover deals under the transitional
arrangements. This implies exporters who had received letters of credit
for export on or before March 17 (when the ban came into effect) will
not be allowed to honour their commitments.
The country meets about 45% of its edible oil requirement through
imports. The second advance estimates released by the agriculture
ministry last month puts this year's rabi oilseed production at 9.59
million tonne - down 6.7% from last year.
Source:
http://www.business-standard.com/common/storypage_c_online.php?leftnm=10&bKeyFlag=IN&autono=34753
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