Chennai: The Union Government may relax import of oilseeds in 2009 to take the heat out of an “overheated domestic” oil and oilseeds market, according to Dorab Mistry, Director, Godrej International Ltd.
Improved supply
Presenting a paper on “Fundamental Approach to Price Forecasting 2008” at the Globoil International in Dubai on Monday, Mistry said cooking oil prices were likely to rise and rule firm, despite improved supply.
Currently, oilseed imports are not taking place due to strict phyto-sanitary conditions imposed by the Centre and a high customs duty of 30 per cent. Crude or unrefined vegetable oils' imports are allowed duty-free, while refined vegetable oil imports are permitted at 7.5 per cent duty.
Lower duty?
What Mistry means is that if the firm trend continues in vegetable oil prices, the Centre may relax the phyto-sanitary conditions and lower the customs duty, probably to zero. The London-based Godrej official was among the first to predict the Centre allowing crude vegetable oils import at zero duty.
The soaring prices of rice would be an important factor for allowing imports of oilseeds freely. Rice is the most important food crop in the world and in view of the raging prices, China and India would pay divided attention to rice. Hence, it could lead to fall in area under oilseeds and pulses, Mistry said.
Global supply of vegetable oils was likely to be 5.4 million tonnes (mt) against a demand of 4.5 mt. Compared with this, last year the supply was 3.8 mt against a demand of 6 mt.
Palm oil move
The higher supply may not prevent the prices of cooking oils from rising, Mistry said, adding that the palm oil market was likely to move sideways the next three weeks, while the soyabean oil market was likely to remain bullish the next 12 weeks.
Projecting the price trend, he said crude palm oil was likely to top 4,500 ringgits ($1,425) a tonne, while RBD palmolein could touch $1,600. On Monday, crude palm oil was quoted at 3,595 ringgits ($1,138), while RBD palmolein closed at $1,295.
Soyabean oil would continue to enjoy a premium over palm oil with active support from the funds. The oil could touch $1,800, while soyabean could reach $16 a bushel, he predicted.
Crucial factors
Factors that are crucial to the price hikes are US plantings of soyabean, the Argentina farmers’ strike and weather developments, especially in oil palm-growing countries of Malaysia and Indonesia.
Improved supply
Presenting a paper on “Fundamental Approach to Price Forecasting 2008” at the Globoil International in Dubai on Monday, Mistry said cooking oil prices were likely to rise and rule firm, despite improved supply.
Currently, oilseed imports are not taking place due to strict phyto-sanitary conditions imposed by the Centre and a high customs duty of 30 per cent. Crude or unrefined vegetable oils' imports are allowed duty-free, while refined vegetable oil imports are permitted at 7.5 per cent duty.
Lower duty?
What Mistry means is that if the firm trend continues in vegetable oil prices, the Centre may relax the phyto-sanitary conditions and lower the customs duty, probably to zero. The London-based Godrej official was among the first to predict the Centre allowing crude vegetable oils import at zero duty.
The soaring prices of rice would be an important factor for allowing imports of oilseeds freely. Rice is the most important food crop in the world and in view of the raging prices, China and India would pay divided attention to rice. Hence, it could lead to fall in area under oilseeds and pulses, Mistry said.
Global supply of vegetable oils was likely to be 5.4 million tonnes (mt) against a demand of 4.5 mt. Compared with this, last year the supply was 3.8 mt against a demand of 6 mt.
Palm oil move
The higher supply may not prevent the prices of cooking oils from rising, Mistry said, adding that the palm oil market was likely to move sideways the next three weeks, while the soyabean oil market was likely to remain bullish the next 12 weeks.
Projecting the price trend, he said crude palm oil was likely to top 4,500 ringgits ($1,425) a tonne, while RBD palmolein could touch $1,600. On Monday, crude palm oil was quoted at 3,595 ringgits ($1,138), while RBD palmolein closed at $1,295.
Soyabean oil would continue to enjoy a premium over palm oil with active support from the funds. The oil could touch $1,800, while soyabean could reach $16 a bushel, he predicted.
Crucial factors
Factors that are crucial to the price hikes are US plantings of soyabean, the Argentina farmers’ strike and weather developments, especially in oil palm-growing countries of Malaysia and Indonesia.
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