Edible oil prices dip as demand falls 23 Jun 2009, 0020 hrs IST, Namrata Singh, TNN

MUMBAI: A glut like situation in edible oils created from large imports and low consumer offtake has put a downward pressure on prices.  According to industry sources, prices of olein, which had risen from Rs 400 per 10 kg to Rs 460 in April, are down to Rs 390 per 10 kg, as consumption declined by around 15%.  A delay in monsoon is partly responsible for fall in consumption of edible oils, as consumer preference shifts away from fried food during summers. However, a fear that the government might impose an import duty on edible oils led to a panic situation among importers who rushed in to make large imports.  An estimated 7-9 lakh metric tonne of edible oil is said to be in the pipeline. What is worrying the industry is an incoming consignment of six lakh metric tonne of edible oil, which may result in a further lowering of prices.  "This consignment is expected to arrive in the next 15-20 days, and could add to the glut unless consumption picks up,'' said Angshu Mallick, V-P (sales & marketing), Adani Wilmar, the branded and packaged edible oil maker which controls one-fifth of the total market.  Given the prevailing situation, imports have now slowed down. Stocks held by dealers and retailers are at optimal levels, leaving no room for placement of further orders.  According to an industry official, however, prices have, more or less, bottomed out. This is also because the price of crude oil on Nymex (New York Mercantile Exchange) is seen to be firming up at around $70 per barrel. The official said he expected demand to pick up soon, which could lead to an upward movement on the price front.  Edible oils are critical for India, which is one of the largest importers of vegetable oils (around five million tonne annually) in the world.