There is an urgent need to allow exchange trading in palm oil and soybean oil as an absence of futures trading, which facilitates hedging, has led to "heavy financial loss" for importers of these commodities during the past three-to-four months, according to the edible oil industry body The Solvent Extractors' Association of India.
The industry has sought futures trading in edible oils, at least in international commodities like crude soybean oil and crude palm oil, which it believes will boost the export of soybean meal -- a derivative of soybean which is widely used as livestock feed.
It said international prices of edible oils have fallen sharply in the last five months and so have the domestic price of edible oil, which provided a great relief to consumers during the current festival period.
However, a sharp fall in price, it said, also led to a drop in domestic oilseed prices, taking their rates almost near to the MSP -- a cause of concern to the government, industry, and especially the farmers.
The industry body last month requested financial market regulator SEBI to resume futures trading of two of the internationally traded edible oils.
For the record, in December 2021, India suspended futures and options trading in seven agricultural commodities -- chana, mustard seed, crude palm oil, moong, paddy (basmati), wheat and soybean and its derivatives -- for one year.
"Also to support the domestic market, SEA has appealed to Government to consider an increase in import duty on Crude Palm Oil and RBD Palmolein by at least 10 per cent to support the farmers to receive a remunerative price for their produce during the harvest period," the industry body said in a statement on Thursday.
Notably, India is the world's second-largest consumer and number one vegetable oil importer, and it meets 55-60 per cent of its need through imports.
Meanwhile, import of vegetable oils -- comprising both edible and non-edible oils -- by India during September 2022 is reported at 1,637,239 tonne, compared to 1,762,338 tonne in September 2021, a 7 per cent decline year-on-year, data compiled by the industry body showed.
The overall import of vegetable oils during the first eleven months of the oil year 2021-22 -November 2021 - September 2022 -- is reported at 130.1 lakh tonne compared to 124.7 lakh tonne during the same period of last year, up by 4 per cent, data showed.
( With inputs from ANI )
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