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November 2012 SAARC OILS & FATS TODAY

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Contents Chief EDITOR S. Jafar Naqvi Consulting Editors T.V. Satyanarayanan K Dharmarajan Editorial Co-ordinator: Syed M K News Editor : Anwar Huda General Manager: Lalitha V Rajan Production: Mohd. Iqbal

v Cover Story

Hyderabad 9248669027 mediatodayhyd@yahoo.com

Building a Roadmap to

Mumbai 9702903993 mumbai.office@mediatoday.in

2013 can be a Ferrari Ki Sawari year for India, if …

Globoil India 2012

— Dorab E Mistry

Acceptance speech — Nadir Godrej

Pune 9881137397 pune@mediatoday.in Ahmedabad 9727866249 ADMN. & MARKETING OFFICE MEDIA TODAY PVT. LTD. T-30, 1st Fl., KHIRKI EXTN., MALVIYA NAGAR, NEW DELHI - 110017. PHONE : 91-11-26681671, 26682045 TELEFAX : 91-11-26681671 E-mail: MediaTodayMails@gmail.com ANNUAL SUBSCRIPTION India: Rs.1000/-for 1 Year / Rs.1950/-for 2 Years Overseas: US$ 120 for 1 Year / US$ 230 for 2 Years Single Copy Cost in India : Rs. 60.00 Printed, Published & Owned by M.B. Naqvi, Printed at Everest Press, E-49/8, Okhla Industrial Area, Ph-II, New Delhi -110 020 and published from E-11/47 -A, New Colony, Hauz Rani, Malviya Nagar, New Delhi-110017 (India) Editor : S. Jafar Naqvi Vol. 15..... ISSUE 2..... November 2012 ‘Saarc Oils & Fats Today’ T-30, Ist Floor, Khirki Extn., Malviya Nagar, New Delhi - 110017 E-mail : MediaTodayMails@gmail.com

SAARC OILS & FATS Today

Revolutionize Commodity Sector

Globoil Legend Award

Bangalore 9342185915 bangalore.office@mediatoday.in

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v Editorial

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v Dairy l Chemical Contaminants in Milk Organic Farming can be a control measure

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-B.K.Wadhwa, S. Arora, Vivek Sharma, B. Surendra Nath, M.Puniya, A. Chhabra

l Indian Dairy: USDA & ASSOCHAM predict higher growth v oils Edible Oils: India aims to keep balance

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— PK Sardar

v Sea Meet SEA’s 41st AGM: A challenging & rewarding year

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— Sushil Goenka

v pRE-eVENT OTAI (WZ) to Organise 67th Annual Convention, Conference & Expo v News l Amul launches full cream buffalo milk in Delhi-NCR l 68% milk in country fail to meet FSSAI standard: Government l Govt lifts export ban on some milk products

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Edit orial A

fter causing many jitters till it entered the midcourse, the south- west monsoon this year, mercifully, did not end on a disappointing note. In fact, it chose to show its benevolent face from the beginning of August and showered its plenty all through the second half of the season. The rising reservoir levels and improved soil moisture augur well for Rabi crops like wheat, rapemustard and pulses. Though the Kharif output of rice, pulses and oilseeds is estimated to be lower compared to that in the previous year, the Rabi production could exceed last year’s performance, if weather conditions behave on predicted lines. The announcement of MSP for Rabi crops should enthuse the farmers to increase the plantings of rape-mustard. Among the Kharif oilseeds, interestingly, soyabean has bucked the trend with a stellar performance. Thanks to increased plantings in Madhya Pradesh and parts of Maharasthra, the first estimates projected the total output of the crop at a record level of 126.7 lakh tonnes. While the advance estimates of all important crops in Kharif this year, which witnessed erratic behaviour of the monsoon, do bear testimony to the increasing strength and resilience of Indian agriculture, particularly in dryland areas, surely, much more needs to be done to step up the growth rate of this sector so as to keep pace with the rising demand. What with rising income levels and India likely to become the world’s most populous country by 2020, a serious challenge for successive governments is going to be how to ensure both food and nutrition security to the people. The answer, obviously, lies in increasing the yield levels of all crops, i.e. ushering in a productivity revolution, without any loss of time. How do we go about it? That is the question. Most relevant in this context is a thought-provoking address by former President APJ Abdul Kalam at the 84th Foundation Day of Indian Council of Agricultural Research (ICAR) in New Delhi. In his address, Dr Kalam has charted out plans to achieve a quantum jump in the

production of various crops and buttressed them by quoting practical examples in some of the states where farmers at the “bottom level of the pyramid” have achieved spectacular success. One success story comes from Bihar, where President Pranab Mukherjee recently launched a roadmap for agriculture aimed at raising growth in this sector to a minimum of 7 per cent per annum. Bihar, said President Mukherjee, can be the first destination for the second Green Revolution. And, why not ? As cited by Dr Kalam, take the case of Paliganj in Bihar, where Technology Information Forecasting and Assessment Council (TIFAC) had the mission of doubling the productivity of rice and wheat in areas near RP Channel-5, using integrated farming and marketing methods. The farmers’ success there owes a great deal to availability of quality farm inputs at the right time, use of best of technology and adoption of best irrigation methods. Gujarat agriculture is another successful growth story. While the all-India average growth rate for agriculture production for the last few years has been only 3 per cent, Gujarat has been able to achieve about 9 per cent growth, and has sustained this rate for the last seven years or so through propagation scientific agriculture and water conservation. In Tamil Nadu, a Precision Farming Project started in Dharmapuri, under the guidance of state agriculture university scientists, has spread to other areas, leading to maximizing productivity and enhancing profitability, besides empowering the farmers socially, economically and technically. Now that the 12th Five-Year Plan will soon be approved by National Development Council, the country’s top forum, the plan programmes can be fashioned on the lines of these successful models. Dr Kalam’s prescription for success is: A mission mode approach, proper leadership and synchronised action among all stakeholders through integrated planning, funding, storing, processing and marketing.

Comments are welcome at: MediaTodayMails@gmail.com Views expressed by individuals and contributors in the magazine are their own and do not necessarily represent the views of “SAARC Oils & Fats Today” editorial board. The magazine does not accept any responsibility of any direct, indirect or consequential damage caused to any party due to views expressed by any one or more persons in the trade. All disputes are to be referred to Delhi Jurisdiction only. .....Editor

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Dairy

Chemical Contaminants in Milk

Organic Farming can be a control measure – B.K.Wadhwa, S. Arora, Vivek Sharma, B. Surendra Nath, M.Puniya, A. Chhabra

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airy animal is like a factory that converts nutrients derived from a variety of dietary constituents into a complex and marketable product, i.e. milk. Since the dairy animals are fed on agricultural by-products and crop residues, the contaminants present in the animal feeds not only have an adverse affect on the health of animals, but the residues or metabolites of these toxicants get accumulated in the tissues and also get secreted along with the milk. Contaminants also enter the food chain unintentionally due to environmental conditions in which the animals are surrounded or due to intake of contaminated water. The various contaminants carried over from animals to milk include pesticides, antibiotics, heavy Metals, radionuclides, mycotoxins, polychlorobiphenyls, dioxins etc.

Let us take a look at the status of the contaminants viz. pesticides being carried over from animals to milk. Pesticides: India with 4% of world’s total cropped area is at the 4th position in the consumption of pesticides and top among the South Asian countries. India has 170 mha of arable land with average pesticide consumption of 0.6kg/ha. Currently plant protection chemicals cover about 30 percent of the total cultivated area in India, of which insecticides, fungicides, herbicides and others account for 61.39, 19.06, 16.75 and 2.80 percent, respectively (Shetty, 2004). 76 per cent of total pesticides are used in the states of AP., Punjab, Karnataka and Maharashtra on crops like cotton, paddy, wheat and jowar. Among the different crops, cotton consumes 44.5 % of the pesticides even though it occupies only 5 % of the cropped area. Cotton is followed by rice (22.0% of pesticides) and other crops. During the post independence period from the year 1960 onwards, there has been an intensive cropping system based on high yielding varieties using inorganic fertilizers and pesticides (Chhabra and Chhabra, 2003). Mainly through the crop: fields, the pesticides have entered into our food chain and are now omnipresent - in air, water, soil, vegetables, fruits, food grains, animal feeds, meat, milk and milk products. Organochlorine Pesticide Residues in Milk: The work on screening of bovine milk for DOT contamination was started in India during the mid 1960s. The DOT

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contamination was 27 to 100% in milk samples collected from Delhi, Punjab, Hyderabad, Parbhani, Haryana and Himachal Pradesh during 1965-1995 as reviewed by Singh and Dhaliwal (2000). Similarly 3 to 100% milk samples collected from different parts of India were found to be contaminated with SHC during the period 1975-1996. During the period 1990-95, DDT residues were detected in 86.7% of the milk samples collected from various states. 43.4 % samples contained DDT residues above MRL (0.05 ppm). BHC residues were detected in 89.7% of the milk samples and 77.8 % samples contained residues of BHC above MRL (0.1 ppm). However on the basis of a- BHC, 80.3% samples were contaminated and only 31.6 % samples exceeded MRL (0.01 ppm) (Agnihotri, 1999). Further work as reported by Unnikrishanan et al., 1999, showed that there was a declining trend of DDT and BHC residues in milk during the period from 1992 to 1999. Wadhwa et al., 2006 compared mean data and samples (%) above MRL for DOT and BHC residues in milk samples of. north region representing Haryana, Punjab, Uttar Pradesh, Delhi and Rajasthan collected during the period 2001 - 2003 with those of period 1990-1995 as reported by Agnihotri, 1999. It was inferred that in north region, mean DDT levels and the corresponding samples above MRL both showed a decline from 0.13 (51%) to 0.03 (12%). Also mean BHC levels and the corresponding samples above MRL both showed a decline from 0.051 (75%) to 0.001 (4%). 14% of milk samples were above MRL for either or both DDT and BHC residues. The range of DDT levels in milk samples of north region (ND* -


Dairy A recent study showed that milk samples collected during 2001- 2002 were contaminated with OPPR. Monocrotophos was above MRL in almost all the samples and DDT and ethion were above MRL in a few samples of milk. Endosulphan, and carbaryl were not detected in any of the milk samples. Kathpal and Kumari also made similar type of observations in the milk samples collected during 1999-2000. Singh (2004) reported that out of 20 milk samples collected_during 2003, a number of samples contaminated followed the trends 0.84) were lower than those (Tr** - 4.330) as reported by Agnihotri, 1999. The corresponding range BHC levels in milk samples of north region (ND-0.015) were lower than those (Tr - 0.39). This clearly indicates that there is definitely a decline in content of above residues in milk. Organochlro Pesticide Residues (OCPR) in Animal Feeds: Kalra and Chawla (1983) reported that animal feeds were contaminated with OCPR viz. DDT and BHC. Monitoring of 105 samples of different feeds from Punjab revealed a contamination of 100 and 80 % for BHC and DDT respectively. About 35 % samples exceeded MRL (Battu et al., 1996). Recently, Kang et al., (2002) evaluated samples of animal feed concentrate and green fodder from Punjab for BHC and DDT level, results showed a substantial decline with respect to a-BHC and total DDT as compared to report of Battu et al., (1996). This declining trend in animal feeds supports the corresponding declining trend of DDT and BHC residues in milk. Multiresidue of Pesticides in Milk: Keeping in view, the importance of multi residue analysis of pesticides in milk and milk products, and changing consumption pattern of pesticides, a few studies have been undertaken on pesticides viz., monocrotophos, dimethoate, phosphamidon, methylparathion, malathion, quinalphos, phorate, ethion chlorpyriphos, carbaryl, six isomers / metabolites of DDT, endosulphan etc. A recent study showed that milk samples collected during 2001- 2002 were contaminated with OPPR. Monocrotophos was above MRL in almost all the samples and DDT, and ethion were above MRL in a few samples of milk. Endosulphan, and carbaryl

were not detected in any of the milk samples (Sharma, 2003). Kathpal and Kumari (2002) also made similar type of observations in the milk samples collected during 1999-2000. Singh (2004) reported that out of 20 milk samples collected_ during 2003, no. of samples contaminated followed the trends: Monocrotophos (0.003 - 0.039 ppm) (5), DDT (0.003 - 0.007 ppm) (5) >’ Chlorpyriphos (0.003 - 0.019 ppm) (3), Endosulphan (0.002 - 0.009 ppm) (3) > Malathion (q.002 ppm) (1), Quinalphos (0.002 ppm) (1). No. of samples above MRL followed the trends: Monocrotophos (5) > Endosulphan (1). However, the average levels were below MRL. The similar type of observations have been made by Vinod (2008). Infant and weaning foods of different brands collected from the market did not contain any of the pesticide residues (Sharma et al., 2005). Multiresidue of Pesticides in Animal Feeds and Water: Residues of OPP, malathion was detected in animal feed concentrate (0.15 mg/kg)” and fodder (0. 73mgl kg) in samples collected form Ludhiana district of Punjab (Kang et al., 2002).. Commercial feed concentrate samples collected from Kamal market were’ found to be contaminated with residues of phorate,

monocrotophos, dimethoate, diazinon, carbaryl, chlorpyriphos and p, p’ DOT at a level of 0.007, 0.008, 0.015, 0.011, 0.002, 0.007 and _.007: ppm, respectively. Out of 15 samples analyzed for OPP’S, 3 were contaminated with phorate and monocrotophos, 4 with dimethoate and diazinon, 2 with chlorpyriphos and p, p’ DDT and one sample were contaminated with carbaryl (Sharma et ai, 2005). The order of contamination of OPP in concentrate feeds was Monocrotophos > Chlorpyriphos > Quinalphos > Diclorovos and in roughages was Chlorpyriphos > Quinalphos > Diclorovos. Monocrotophos was totally absent in roughages (Singh, 2004). A similar type of trend was observed by Vinod (2008). The presence of OPP has been indicated in water samples from Uttar Pradesh. Quinalphos, parathionmethyl and ethion were detected in I few samples from river Ganga and malathion and monocrotophos were also detected from ground water samples from some areas of Farukhabad district (Mohpatra et al., 1994). A study conducted in Aligargh district revealed that malathion and parathion were present in ranges of 10.0 to 27.6 and 0.03 to 0.16ppb respectively in water samples collected from irrigation and domestic wells and canals (Bansal and Gupta. 2000).

MRL (ppm) of pesticide residues in milk by Codex Alimentarius Commission, 2009 & PFA, 2009: Name of Pesticides Acephate Aldrin, Dieldrin Carbaryl Chlorpyrifos D.D.T Diazinon Dichlorvos Endosulfan Ethion Fenitrothion HCH, á, â, ã (Lindane), ä Heptachlor Monocrotophos Phorate

CAC, 2009* 0.02 0.006 0.05 0.01 0.02 0.02 0.02 0.01 -- 0.002 0.01 (Lindane) 0.006 -- 0.01

PFA, 2009* -0.15 F -0.01 F 1.25 F ---0.5 F 0.05 F 0.05, 0.02, 0.01/0.2F, 0.02 0.15 F 0.02 0.05 F

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Dairy * MRL are expressed in ppm i.e mg/Kg on whole milk basis ** unless otherwise stated, MRL are expressed in ppm i.e mg/Kg on milk basis; F- fat basis. From the above table, it is obvious that CAC, 2009 has got uniform pattern of MRL on milk basis for all pesticide residues whereas in PFA, 2009, the corresponding pattern is not uniform. For some it is on milk basis and for some which are probably fat soluble, it is on fat basis. Recent methods used for analysis of all types of pesticide residues whether fat soluble or water soluble are based upon use of milk rather than fat extracted from it. CAC, 2009 covers MAL for 81 pesticide residues whereas PFA, 2009 covers MRL for only twenty three pesticide residues in milk. Consequences: Pesticides have the harmful effects, if used unjudiciously. Mode of action of various insecticides is very much similar in insects and mammals. Organochlorines exert their insecticidal activity by binding to the nerve membrane and interfering with the transmission of nervous impulses, possibly by upsetting the sodium or potassium balance across the nerve membrane. Organophosphate pesticides apparently inhibit the action of several enzymes, but the enzyme acetyl cholinesterase has been reported to be the main victim. In the absence of effective acetyl cholinesterase, the liberated acetylcholine accumulates .and I prevents smooth transmission of nervous impulses across the synaptic gap at the nerve junction. This causes loss of muscular coordination, convulsions and ultimately death. Similarly organocarbamates also affect the activity of acetylcholinesterase and thereby preventing the effective transmission of nervous impulse (Cremlyn, 1978). The toxicological effects of organochlorines are: vomiting, paraesthesia, disturbance of balance damage to peripheral nerves, blindness, infant mortality and negative influence on reproduction activity and liver functioning. Similarly, toxic effects of organophosphates and organocarbamates are: acute intoxication - convulsions, respiratory failure, cardiac arrhythmias, long term central nervous system I changes, mutagenicity, carcinogenicity, organospecific toxicity of heart, liver and kidney etc.

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SAARC OILS & FATS Today

Control Strategies: With the increasing knowledge of status/ incidence of pesticide residues in food products and their toxicological effects, there is now a big challenge before us. With the implementation of WTO, the quality of food products is how not an option put- an obligation to compete with international market. The positive approach is that now most of the persistent organochloro pesticides have been banned from the agriculture sector. Strict ban is still required on their manufacture as well as application. There is still a great need to adopt different useful strategies for controlling pesticide residues in the food chain. These can be: — Those pesticides which have been banned for their use in agriculture, their manufacture should also be banned. Then only we can be sure about their absence in milk. Otherwise these will appear in milk from environment (air, water and soil) and other possible sources. — The major currently used pesticides in India namely monocrotophos, malathion, methyl parathion have been banned in other countries hence there is need to ban these pesticides in India also. — Measures should be taken to use less harmful biopesticides derived from plants and bacteria. Biopesticides and biofertilizers, when used as a component of integrated pest and nutrient management programme can bring down the use of synthetic pesticides while keeping the yields high. — Since our population is getting chronic exposure of pesticides, therefore there is a need to develop health education packages of practices to educate the people in order to minimize the exposure of pesticides to human beings. — Organic Farming: Organic farming refers to farming methods practiced without using artificial chemicals i.e. something natural and inherently good. It is an ecological production management system that promotes and enhances biodiversity, biological cycles, and soil biological activity. It is based on minimal use of oft-farm inputs and on management practices’ that restores, maintains and enhances ecological harmony. Organic farming also improves soil fertility and health of agro ecosystems, making farming sustainable

November 2012

over longer periods. Less financial inputs are required and could be managed with the available resources. Global market for organic products is increasing. Annual growth rate is 15-20% (menon, 2008). In India, area under organic certification process is 8.6 lakh ha. Growth of organic certified areas in India is significant since 2004 to-date. Natureland, a non profit making association of farmers in Germany has been accredited in India by APEDA recently in the spring of 2004 to practice organic farming. Further, Governments¬ of Maharashtra, Karnatka, MP, Gujrat and Tamilnadu have included organic farming in their agricultural policies and it has been estimated that area under organic farming has been extended to 2 lakh hectares in these states. Mizoram and Uttaranchal have declared themselves as fully organic states (The Hindu, August 2004). Growth of organic certified areas in India is significant since 2004 to-date. According to latest updates, area under organic farming in India is 8.6 lakh ha (Yadav, 2008). At present, organic dairying and organic milk is in selected countries of the world. Organic milk production in India has not really taken off as yet. There is long term scope for export of organic milk powder in India. The market demand for organic dairy products is next to fruits and vegetables. The people from higher status may look for organic milk products. Organic milk market will be for old persons, children, patients with terminal disease like cancer, AIDS etc. Organic ghee market will be for temples, ashrams and old persons. Health status of organic herd has been found to be better than the conventional herd. Frequency of mastitis was also found to be lower in organic dairy production with a concomitant decrease in the content of contaminants in milk. Also milk quality of organic herds in terms of chemical contaminants, microbiological parameters (Toledo et al., 2002) and nutritional parameters (Sehghal et al., 2006) was found to be better than that of conventional herds. Thus, it is possible to minimize the level of contaminants in milk by reviving organic farming and rearing of animals organically. (The authors are from National Dairy Research Institute, Karnal & SRS of NDRI, Adugodi, Bangalore)


Dairy

Indian Dairy

USDA & ASSOCHAM predict higher growth The value of the Indian dairy industry is expected to touch Rs 5 lakh crore by 2015, with milk output pegged at 190 million tonnes at the end of the period, according to industry chamber ASSOCHAM. The report also said that the Indian dairy industry is growing at the rate of 10 per cent per annum

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ountry’s milk production, highest in the world, is estimated to touch a record 135.5 million tonnes next year on firming domestic demand and better prices, a study has said. It is expected to be sufficient to meet the local demand, and there may not be significant export volumes of skimmed milk powder (SMP) even as the ban has been lifted on the same in June 2012. “As a result of strong prices, active government support, and growing demand, USDA forecasts 2013 calendar year fluid milk production at a record 135.50 million tonnes, 5 per cent more than 2012,” the US Department of Agriculture (USDA) said in its latest report. Similarly, production of butter and ghee is estimated to increase by 5 per cent to 4.75 million tonnes next year. While fluid milk production is expected to continue increasing in 2013, production of non-fat dry milk (NFDM) is only expected to face marginal increases due to large stocks carried over from this year, it added. USDA also noted, “This estimate may fluctuate slightly in response to fodder availability and overall monsoon conditions in 2013.” India accounts for about 17 per cent of the world’s total dairy production, and consumes almost all of it. The report highlighted that over the last several years, India has experienced strong growth in demand for dairy products, which is estimated to be 6-8 per cent annually, approximately twice the growth rate of supply.

Given Indians’ preference for dairy over other proteins and rising dairy prices, the sector is attracting new public and private sector investment, it said. Quoting industry sources, the report said that about 30 per cent of Indian dairy production is handled by the organised sector and 70 per cent by the unorganised sector. Given Indian consumer preferences and trust for branded milk products, it is possible that the unorganised sector’s market share is slowly decreasing, it added. Non-fat Dairy Milk (NFDM) stocks grew significantly in 2012 as output rose in response to remunerative prices and the government’s prohibition on

milk powder exports, it added. The government had imposed a ban on export of skimmed milk powder (SMP) in February last year due to rising prices of milk but had removed the ban in June 2012. India produces approximately 17 per cent of the world’s total dairy production and consumes virtually all of this. “The country follows a ‘low-input/lowoutput’ dairy output model characterised by production costs and yields amongst the lowest in the world”, USDA said. The CY 2012 production estimate for NFDM remains unchanged at 4,50,000 tonnes. The US agency also revised the butter production estimate for 2012. Butter production has been revised up

November 2012 SAARC OILS & FATS TODAY

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Dairy 2,000 tonnes to 4.53 million tonnes. For 2011, the butter production has been revised upwards by 10,000 tonnes to 4.33 million tonnes due to good milk production and a favourable 2011 monsoon, it added. According to government data, India, the world’s largest producer of milk, had produced about 127 million tonnes of milk in the 2011-12 fiscal. ASSOCHAM Estimate The value of the Indian dairy industry is expected to touch Rs 5 lakh crore by 2015, with milk output pegged at 190 million tonnes at the end of the period, industry chamber ASSOCHAM said. According to an Associated Chambers of Commerce and Industry of India (ASSOCHAM) study, the Indian dairy industry is growing at the rate of 10 per cent per annum. “Milk production is likely to reach about 190 million tonnes in 2015 from current level of about 123 million tonnes,” the ASSOCHAM study, titled, ‘Indian Dairy Industry: The Way Ahead’, said. India -- the world’s largest milk producer -- accounts for around 20 per cent of global milk production, with most of it consumed domestically, it added. In India, about 60 per cent of milk is consumed in liquid form, while the remaining 40 per cent is used in the form of butter, clarified butter (desi ghee), cheese, curd, paneer, ice cream, dairy whiteners and traditional sweets. “Growing at about 10 per cent annually, the Indian dairy industry is predominantly controlled by the unorganised sector, which accounts for nearly 85 per cent,” ASSOCHAM Secretary General D S Rawat said in a statement. About eight crore rural families across India are engaged in dairy production and the rural market consumes over half of the total milk produced, he added. According to the study, an upward spiral in prices, the lack of proper infrastructure like cold storages and absence of a transparent milk pricing system are affecting retail consumption of milk and leading to escalating milk prices in the domestic market. The lack of fodder, resulting in low yield from cattle, is another problem 12

SAARC OILS & FATS Today

affecting the sector, it added. Despite overall food inflation easing marginally to 10.63 per cent for the week ended November 5, milk prices grew at a faster pace of 10.74 per cent during the period. The private sector can play a pivotal role in reducing the cost of milk production by employing advanced techniques to enhance productivity, providing breeding facilities for cattle and by developing processing and marketing infrastructure, Rawat said. Andhra Pradesh, Bihar, Haryana, Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh are the leading milk producing states in the country. Top Brands increase consumption Dairy brand Mother Dairy is urging patriarchal Indians to incorporate their mother’s names in their names. An ongoing campaign “Maa Iasa Koi Nahi” has nudged fathers or husbands from the limelight to replace them with the mothers, akin to Sanjay Leela Bhansali. “So far, Indian advertising space has promoted milk by targetting mothers. However, it weren’t them who needed to be convinced, it were the kids who needed to be told about the goodness of milk,” says Amitava Mukherjee, Business Head, Milk and Dairy Products, Mother Dairy. The brand believes that incorporating mother’s name in one’s names would be a befitting tribute to the mothers and an emotional appeal pushing milk consumption in youngsters. If film director Bhansali could adopt the middle name “Leela” to pay tribute to his mother, so could all Indians, believes the dairy brand promoted by Anand-headquartered National Dairy Development Board. “Words may fall short to express your love for your Mother but you can sure dedicate few lines and express how special she is. We trouble our Mom daily but she never complains. She takes it all, giving an angelic smile in return. So today for a change, let’s delight her by listening to what she has to say. You can start by drinking a glass of milk,” says the Mother Dairy campaign “Maa Jaisa Koi Nahi” currently running on social networking site Facebook. The campaign is not about mothers but more specifically about

November 2012

“thanking your mother”, say the men behind the campaign. Mother Dairy invited consumers to design the new pack for its milk to increase engagement with the brand. “This helped the brand team and the creative team immensely to understand from the consumer what they think of our brand,” says an executive part of the campaign. The campaign encourages consumers to write a letter to their mother expressing love towards her and sign off with their mother’s name as their middle name. “This way when after marriage usually a lady’s name gets lost somewhere, this special initiative would surely touch a mother’s heart. This letter can be emailed or physically couriered to one’s mother adding one more element of surprise for her,” Mukherjee said. The brand believes the time is right to hit the consumer as it expands panIndia. The brand is marketed across UP, Uttarakhand, Haryana, Rajasthan, Hyderabad and TN and would soon launch in Pune. Yet another homegrown dairy brand AMUL from Gujarat Co-operative Milk Marketing Federation in its Facebook profile tells the young consumer: “Milk is rich in protein and calcium which help build the muscles you need to throw a ball of climb a tree. One 200 ml glass of milk provides power-pack of nutrients a child needs daily.” Dairy brands in a country that produces 122 million metric tonnes of milk per annum have finally realised that milk can not be promoted in a conventional manner. “Milk is not boring and brands repeatedly will have to remind the consumers who are taking to colas. The fight in the category is not about ice creams or butter. It is milk that is an original drink versus the colas,” says Jayen Mehta, General Manager (Planning and Marketing), GCMMF. AMUL, that sells 90 lakh litres of milk per day, has been repositioned among the consumers as an exciting category through its association with events that see plenty of youth engagement. AMUL associated itself with the Hollywood movie Spiderman and sponsored the Indian contingent at the London Olympics. n


Oils

Malaysian palm oil futures may dip – Gnanasekaar T.

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alaysian palm oil futures on Bursa Malaysia Derivatives exchange ended higher on encouraging export data that showed firm demand and some short-covering ahead of a holiday weekend. Cargo surveyor ITS reported on Thursday an 11 per cent jump in Malaysia’s October 1-25 palm exports from a month ago. Another cargo surveyor, Societe Generale de Surveillance, reported a nine per cent improvement for the same period. There was a let down by the US Federal Reserve as there was no nnouncement of further stimulus that could boost global economic growth and commodity demand, led to a sell-off across the commodity complex. In related markets, soya complex faced pressure from expectations that Brazil and Argentina, the biggest producers after the US, will harvest record crops next spring. CPO active month futures pushed

further higher against our expectation. Prices have been gradually inching higher, but still the overall bearish bias still persists. Price structures warn of a decline towards Malaysian ringgit (MYR) 2,395-400 a tonne levels initially or even lower to MYR2,210 in the coming sessions. Decline below MYR2,520 could open the downside once again. As we focus on near-term bearishness, in the medium to long-term, there is a good possibility of a return near MYR3,000 or even higher. Immediately, while MYR2,625-35 caps upside attempts, a decline lower to above mentioned levels look likely. Unexpected rise above MYR2,695 could hint that the bearishness has abated. Presently, the wave counts remain mixed with no clarity at all on long-time direction. As mentioned in the earlier update, we will give up the expectation of an impulse still in progress on a daily close

below MYR2,675 and such a fall could target MYR2,400 at least. A possible wave “C” is now in progress with potential targets in the MYR2,350-75 range which has been broken and looks like it could extend to MYR2,100 also. Ideally, a new impulse could begin from lows near MYR2,050-2,100 levels. RSI is in the neutral zone indicating it is neither overbought nor oversold. The averages in MACD are below the zero line of the indicator hinting at bearishness to be intact. Therefore, look for palm oil futures to decline once again. Supports are at MYR2,555, MYR2,520 and MYR2,400. Resistances are at MYR 2,625, MYR2,660 and MYR2,705. (The author is the Director of Commtrendz Research and he is also in the advisory panel of Multi Commodity Exchange of India Ltd. The views expressed in this column are his own and not that of MCX. This analysis is based on the historical price movements) Courtesy: Hindu Business Line

Canola Oil imports shoot up

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he use of canola oil in the country seems to be catching up with about 56,000 tonnes being imported in the last nine months. Canola oil, claimed to be good for the heart, is extracted from canola seeds that are grown largely in Canada. Cory McArthur, Vice-President, Canola Council of Canada, said that the demand for canola oil in India has witnessed a steady growth since it was introduced in 2007. Since 2010, at least 500-700 tonnes of canola oil have been imported regularly. Early 2012, import reports indicated that

56,000 tonnes of canola oil moved in the Indian marketplace, he said. “Experts estimate that the demand could be as high as 1,00,000 tonnes. This growth will primarily be driven by the demand for heart-healthy cooking oil,” he said. Apart from demand from healthconscious youngsters, the demand for canola oil is driven by the rise in living standards of people in rural India. “As the world capital of diabetes where heart disease is the leading cause of death, India can benefit from the availability of heart-healthy canola oil. When used in the place of saturated fat, canola oil can reduce the risk of heart disease,” said

McArthur. Canola oil has the least saturated fat amongst all common edible oils and is a good source of omega-3 fat and vitamin E. Canola oil is also extremely versatile with its neutral flavour, light texture and high heat tolerance. However, canola has a long way to go in India before it can topple the most popular sunflower oil. India is the world’s second largest edible oil consumer and importer. It consumes about 15 million tonnes of oil a year, but produces only 6.5 million tonnes. Vegetable oil consumption in India has witnessed an annual growth of four per cent or about 4,00,000 tonnes.

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Oils

Edible Oils

India aims to keep balance – PK Sardar

E

dible oils and fats are essential ingredients for a wholesome and balanced diet. The World Health Organisation (WHO) has recommended that the total fat intake as a percentage of energy should not be less than 15% or exceed 30%. So, oils and fats play an important role in the food sector. What is required now is to assess the minimum and optimum nutritional requirement of edible oils in accordance with the WHO recommendations, among various segments of the population. The total amount of visible and non-visible sources of edible oils should be considered in formulating an appropriate plan of action to meet any nutritional deficit.

Table I shows India’s annual demand for oilseeds and edible oils based on a bahavioural approach, and using projections by the Expert Group, set up under the Ministry of Agriculture by the Planning Commission. Based on the growth rate in 20I0-11 and 2011-12, the annual requirement of edible oil in 201213 is estimated at 155.46 lakh tonnes or 555.21 lakh tonnes in terms of oilseeds. India’s annual per capita consumption of edible oils increased steadily from 4 kg in the 1970s to 10.2 kg in the late 1990s, to current levels of about 13.5 to 14 kg. However, this still ranks well below the world average of about 24kg (including consumption of bio-energy), thereby signifying the high growth potential of the edible oils industry. This sector remains the principal source of livelihood for more than 58% of India’s population. Compared to other countries, India faces a greater challenge. 14

SAARC OILS & FATS Today

With only a 2.3% share of the world’s total land area, it has to ensure food security for its people who make up about 17.5% of the global population. In spite of the fact that indigenous production of oilseeds has considerably increased since Independence, it is still inadequate to meet the demand for edible oils. The main reason is that oilseed productivity has remained almost stagnant, while demand has been growing because of the improved standard of living and consequent increase in per capita consumption and population growth. At about 1,193 kg/ha, Indian oilseed yields are about half of the world’s average and less than one-third that of leading producers. India is the fifth largest oilseed-crop producer. With 27.47 million ha, it has the world’s largest area under oilseed cultivation. It is the world’s highest producer of castor seed, secondlargest producer of ground nut and third biggest producer of rapeseed. The oilseeds are grown mainly on marginal and sub-marginal lands under low input usage. Moreover, less than 25% of the oilseed area is irrigated, rendering cultivation vulnerable to weatherrelated yield risks. This has resulted in slow growth in oilseed production and continued low yields. More than any other oilseed crop, oil palm could help meet the rising demand for edible oils in India as the crop produces 6-8 tonnes/oil/ha per year, compared to less than 0.5 tonnes from other oilseeds. Palm oil could significantly reduce the gap between demand and supply. It is essential for India to increase the availability of vegetable oils from all domestic resources by encouraging diversification of land from food grains to oilseeds; increasing productivity of oilseeds; and fully exploiting non¬ traditional domestic sources. The possibility of cultivating genetically modified oilseeds should be considered to improve yields and productions, taking

November 2012

into account the relative economic benefits, bio-safety, environmental concerns and other related issues Minimum Support Price (MSP) of oilseeds To promote oilseeds cultivation and provide remunerative prices to farmers for their produce, the MSP of oilseeds is revised from time to time. India is primarily an agricultural economy and it is imperative that the farmers should get remunerative prices. The COOIT had requested the government to enhance the MSP for oilseeds at least by 30-40%. The government has now broadly considered the proposals of COOIT in the case of oilseed crops of 2011-12. The MSP of mustard/rapeseed has been increased from Rs 1,850 per quintal to Rs 2, 500, or an increase of 35.1 %. The MSP of safflower has risen from Rs 1,800 per quintal to Rs 2,500 (up by 3B.9%).This is an important step for the domestic oilseeds sector. There is a need for a coherence, stability and equilibrium of policy between levels of MSP for oilseeds and the consequent level of import duties on various edible oils. The MSP for oilseeds could be revised from time to time in such a way that derived costs of domestic oils obtained from the domestic oilseeds are on par with the landed cost of imported, oils. Edible oil imports India’s dependence on edible oil imports has increased to about 50%, which is not desirable from the National Food Security angle. In pursuance of the government’s policy of liberalisation, there have been progressive changes in the import policy in respect of edible oils over the past few years. Edible oils, which were in the negative list of imports, were first - de-canalised partially in April 1994, when imports of edible vegetable palmolein were placed Under Open General Licence (OGL) subject to 65% of basic Customs duty.


Oils Subsequently imports of other edible oils were also placed under OGL, except for coconut oil. In order to harmonise the interests of farmers, processors, and consumers – as well as regulate large volumes of imported edible oils to the extent possible - the import duty structure on edible oils is reviewed from time to time. In February 2005, the import duty, on crude palm oil/crude palmolein was raised to 80% and import duty on refined palm oil/RBD palmolein was raised to 90%. Thereafter, the import duty on edible oils was gradually reduced. With effect from April I, 200B, the import duty rates on crude vegetable oils of edible grade and refined edible vegetable oils have been reduced to Nil and 7.5% respectively. Over the last two decades, India has become the world’s largest importer of vegetable oils. It absorbed 837, 1 00 tonnes in Oil Year 2010-1 I, compared to 882,300 tonnes the previous year. From November 2011 to March 20I2, the volume was 370,600 tonnes compared to 302,400 tonnes (up by 22.55%) during the corresponding period last year. This has affected the production of domestic oils, as farmers can derive better returns from growing other crops. To alleviate the situation, import

duty on all edible oils should be closely monitored and effective remedial measures taken to eliminate the adverse impact of substantial imports of edible oils on the interests of oilseed farmers. Removing impediments to CPO imports CPO of edible grade, in loose or bulk form intended for further processing/ refining, is being imported under OGL in accordance with the government’s liberalised policy. Time and again, such consignments have been detained at ports on the pretext of non¬conformity with standards in respect of acid value/rancidity prescribed for edible palm oil. Under the law, imported CPO, similar to domestic raw/crude solvent extracted oils, is not considered edible as such. Hence, it cannot conform to the quality standards prescribed for edible palm oil under the Food Safety and Standards (Food Products Standards and Food

Additives) Regulations 2011, until it is refined. Action is therefore required to resolve such problems permanently and to provide relief to importers in order to maintain adequate availability of safe edible oils for the benefit of consumers, as well as to eliminate possible disruption to supply.

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Oils

Domestic vegetable oil industry The domestic turnover of the vegetable oil industry is about US$ 1 ,800 crores and the import-export turnover is about US$900 crores per annum, consisting of US$630 crores for vegetable oil imports and US$270 crores for the export of seeds, meal, oils and fats primarily from treeborne oilseeds. To check instances of under-invoicing, the government began fixing tariff values on imports of certain edible oils with effect from Aug 3, 200 I. This was followed by periodic revisions in accordance with variations in the international prices of such oils. There has been no revision of tariff values on edible oils since Sept 15, 2006. The CIF price of RBD palmolein on May 8, 2012 was US$1163/tonne (Table 5), while import duty is being levied on the tariff value, i.e. US 484/tonne�Thus, the effective rate of import duty on RBD palmolein comes to only about 2-3%, rather than 7.5%. As a result, RBD palm olein imports went up from 113,000 tonnes in 2005-06 to 108,200 tonnes in 2010-11 primarily on account of non-alignment of its tariff value with the prevailing international market price. This hit the domestic oil processing/ refining industry which comprises over 150,000 oil mills, 810 solvent extraction plants, 128 vanaspati units and 1,060 refineries. According to available information, the average capacity utilisation of the refineries is about 35%, leaving large unutilised capacity due to want of crude oils. The impact will be hardest on the vegetable oils industry, which has invested more than US$180 crores and employs more than 10 lakh people directly and many more indirectly. An alarming trend was seen from November 2011 to March 2012, in that RBD palmolein imports rose sharply by 78.29% to 821,960 tonnes compared to 461 ,034 tonnes in the same period last year. Local oil palm farmers, who may also be affected adversely by substantial imports of RBD palm olein, deserve more support from the government 16

SAARC OILS & FATS Today

to maintain/enhance growth of the sector. This is particularly because the government has announced in oil its Budget proposals for 2011-2012 an allocation of Rs300 crores to bring 60,000 ha under oil palm, as well as an initiative to yield about 3 lakh tonnes of palm oil annually in five years. The authorities should therefore take urgent remedial action to protect the processing/refining industries, failing which many refineries are likely to be closed. This would also discourage domestic oil palm farmers, leading to unemployment of lakhs of people directly or indirectly associated with the domestic vegetable oils sector. Edible oil exports Exports of all oilseeds such as HPS groundnut, sesame seed, sunflower seed and mustard seed have been made free without any quantitative or licensing requirements. Extractions are freely exportable. Exports of edible oils, which had been free, were initially banned w.e.f March 17, 2008. However, w.e.f April 1, 2008 the restriction was partially lifted in respect of coconut oil (through Cochin Port) and certain oils produced from minor forest origin. Then, vide a Notification dated Nov 20, 2008 and issued by the Department of Commerce, exports of /edible oils were permitted in branded consumer packs of up to 5 kg, subject to a limit of 10,000 tonnes for a year. This was extended up to October 2010 vide a Notification dated Sept 4, 2009. The ban on edible oil exports - apart from the stipulated waivers – was extended up to September 2011 and then to September 2012. However, the circumstances under which the ban was imposed no longer exist and have become obsolete. Exports, if freely allowed, are unlikely to cross 0.50.6 lakh tonnes per annum. This is negligible compared to edible oil imports of 56,000 tonnes in 2007-08; 82,000 tonnes in 2008-09, 88,000 tonnes in -2009-1 0; and 84,000 tonnes in 2010. Based on the 37,060 tonnes imported from

November 2012

November 20 11 to March 2012, imports for 20 I J -12 are estimated at 88,940 tonnes. Edible oils exports, if allowed even by 1,000 tonnes, would only reduce excess supply to that extent. But such as step would certainly encourage oilseed farmers to target higher production due to better returns from export of their produce. Government intervention Tax rates The Empowered Committee of State Finance Ministers is finalising tax rates under the proposed Goods and Service Tax (GST).This will integrate most of the existing indirect taxes. Essential commodities are highly price sensitive and any inflationary impact is reflected in the Consumer Price Index. Edible oil is one such mass commodity of consumption, being used as a cooking medium across the country. Edible oils and oilseeds deserve to be classified under a lower rate as they are price sensitive essential commodities. Moreover, edible oil, being an agro-based product, has an impact on the livelihood of a large number of farmers. The COOIT has, therefore, suggested that sensitive essential items of mass consumption like edible oils, oilseeds and oil meal should either be wholly exempted or taxed at the lowest slab rate, on par with food grains and pulses under the proposed GST structure, and should be the same in all States. Subsidised edible oils To provide relief to poorer sections of society from rising prices, the Central Government introduced a scheme to distribute 10,000 tonnes of edible oils in 2008-09 at a subsidy of Rs 15/kg through State Governments/Union Territories at 1 litre per ration card per month. An additional subsidy of Rs 10/ kg was provided from January to March 2009 on oils imported by Public Sector Undertakings (PSUs). (The author is Executive Director, Central Organisation for Oil Industry and Trade & Former Chief Director and Edible Oils Commissioner, Government of India) Courtesy: Global Oils & Fats Business Magazine


November 2012 SAARC OILS & FATS TODAY

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SAARC OILS & FATS Today

November 2012


November 2012 SAARC OILS & FATS TODAY

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Globoil India 2012

Building a Roadmap to Revolutionize Commodity Sector The 16th Edition of Globoil India 2012, a premier International Conference and Exhibition on Vegetable Oil, Feed & Feed Ingredients, Oilseeds, Related Industries & Services was held in Mumbai during 21st – 22nd & 23rd - September 2012. One of Asia’s largest Commodity Sector Events, it was supported by 30 National & International Organizations. Also the who’s who from leading industry houses connected with the prominent personalities of the edible oil industry & Agri – Commodity Sector. Companies from all over the world including Indonesia, Malaysia, Singapore, China, Middle East & Europe participated. Over the years this forum has been successful in forging close relationship with various constituents of the Indian & International Edible Oil trade. This forum is patronized by Ministry of Agriculture, Ministry of Food & Consumer Affairs, Tata, Reliance Industries, Godrej Industries, Hindustan Lever Ltd, Marico Group, Adani Group, Ruchi Soya, Cargill, Bunge, Noble, Sime Darby, Musim Mas, Permata Hijau, Felda, Willmar, ADM, ITC Ltd, Allanasons Group, Alghurair, Liberty Group & Agrotech Foods. Globoil India Awards instituted in 1998 have become immensely popular. It was an occasion for the industry to celebrate and acknowledge and reward performances. 20

SAARC OILS & FATS Today

November 2012


Cover Story

Price outlook 2012-13

– Dorab E Mistry

2013 can be a Ferrari Ki Sawari year for India, if …

Director, Godrej International Ltd.

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ot much has gone India’s way so far this year, but we were very fortunate with the recovery of the monsoon rains, August 1 onwards. Since childhood I have noticed that if the Indian Kharif rains are skimpy, the Rabi rains are abundant. I pray that history repeats itself this year too. As usual I shall keep referring to my earlier papers delivered at Price Outlook Conference in Kuala Lumpur on March 9 this year and to my most recent paper at the Goldman Sachs Commodity Conference in Singapore on September 6. As I said in Singapore, the big story of 2012 is not CPO production but Palm oil Stocks. We meet just 10 days after the announcement of QE3 by Chairman Ben Bernanke. This is an Open Ended QE which may result in bond buying of up to 1 Trillion Dollars. We are now in new territory. Many commentators have said ‘Don’t bet Against the Fed.’ Market developments We are in the middle of corn harvest in USA and canola harvest in Canada. Harvests in Russia, Ukraine as well as in the EU are almost done. Next month will see rapid harvesting of soybeans. We have seen harvest pressure with soybeans trading down below US$17 and corn remaining below US$8 per bushel. The general expectation is that the world has a difficult rationing job for the calendar year 2013, at least until North American harvests. However, as I write this paper, we are witnessing a massive sell-off in Ags and in most other commodities. Palm: I am very pleased that my production model for Palm oil has come good once again. With regard to Malaysia, my estimate is that from mid June 2012 we have entered a High Production Cycle. I expect this cycle to last at least until mid- December 2012 even if turns out to be shorter than usual.

I say it could be just a six month cycle because a mild El Nino has commenced from August 2012 and may affect CPO production from January. It is too early to make that prediction. We need to watch rainfall in September, October and November. If as some weathermen expect, we have heavy rain in November, the High Cycle may be further extended. My last forecast for Malaysian CPO production was 18.2 million tonnes with Indonesia producing 27 million tonnes. The latest information from plantations seems to suggest that Malaysia may under-shoot slightly, whilst Indonesia is likely to over-shoot. It is possible that Malaysian production will only reach 18 million but Indonesia will reach 27.5 million tonnes. Demand for palm oil in particular and for vegetable oils in general has been softer than expected in 2012. There are two main reasons for this: Much slower growth in the production of bio-fuels from vegetable oil - partly as a result of Double Counting benefit for Waste Matters And the difficult economic situation in developing countries, coupled with high prices. The EU has, within the last one

month, launched an Anti- Dumping Enquiry against Indonesian and Argentinian bio- diesel manufacturers. Generally an Anti-Dumping Enquiry lasts about one year and Anti-Dumping duties can be levied retrospectively. This will slow down the use of palm diesel made in Indonesia. There are also certain new features with regard to GHG savings. Hence overall, growth in the use of palm oil for bio diesel will be flat to negative. As regards edible demand, the one bright spot has been India. The deep discount of palm oil to soya and sun oil has bought market-share in India. In most other markets, there is little or no room for further market share gains for palm oil. Therefore, overall, palm oil demand has not been buoyant despite its huge discount to soya oil. Palm Oil Stocks & very comfortable Supply As I mentioned in my Singapore speech, almost all analysts including myself had misjudged and underestimated palm oil stocks in Indonesia. Since 2010, palm oil stocks in Indonesia have hovered between 3.5 and 4 million

November 2012 SAARC OILS & FATS TODAY

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Cover Story

The Indian government is aware of the high Export Taxes levied by Indonesia and also by Malaysia (though Malaysia is issuing tax free export quotas). It is quite unfair and unjust that when India practises Free Trade in vegetable oil by removing import taxes, the Exporting countries squeeze the hapless Indian consumer. India also needs to think seriously about its own domestic oilseed farmers. Oilseed farming must be made more profitable and must be upgraded. Some form of protection to oilseed farmers will transform India’s domestic production as well as productivity tonnes as against the popular guesstimate of 1.5 to 2 million tonnes. It is a tribute to Indonesian producers that they kept this information secret and shrewdly diverted attention to Malaysian stocks. Or, was it a case of the Indonesians themselves not knowing their actual stocks? The supply position on palm oil is therefore extremely comfortable and is likely to remain that way for the next several months. Malaysian stocks are also expanding month by month. There has been a very big Export Push from Malaysia towards India and other regions from August onwards. Yet Malaysian September exports are nothing to write home about. Indonesia seems to be winning most of the new business. October exports from Malaysia are also unlikely to be impressive as India enters its new crop months. Therefore stocks in Malaysia will continue to grow in October, November and December. I generally do not forecast monthly stocks. However, I shall not be surprised if on 1st January 2013, Malaysia has almost 3 million tonnes of palm oil stocks. 22

SAARC OILS & FATS Today

Indian Import Duties The Indian Refining industry heaved a sigh of relief when the Indian government unfroze the Tariff Value on RBD Olein and brought it in line with market prices. The Indian government is still worried about food price inflation. As India resumes the Reform process, the economic sentiment recovers and the Rupee strengthens once again, the problem of food price inflation in 2013 will begin to recede. As that happens it is not inconceivable that India will be tempted to introduce an import duty on CPO and to raise the import duty on RBD Olein. It is logical to think in those terms. The Indian government is aware of the high Export Taxes levied by Indonesia and also by Malaysia (though Malaysia is issuing tax free export quotas). It is quite unfair and unjust that when India practises Free Trade in vegetable oil by removing import taxes, the Exporting countries squeeze the hapless Indian consumer. India also needs to think seriously about its own domestic oilseed farmers. Oilseed farming must be made

November 2012

more profitable and must be upgraded. Some form of protection to oilseed farmers will transform India’s domestic production as well as productivity. India also suffers a massive budgetary deficit. A small import tax on all vegetable oil imports would be a painless method of revenue generation. Soya: I am on record as saying that soybean prices will peak in December or January at US$ 20 per bushel. However, I also reckon that most of the rationing job will be accomplished when prices are in the range of US$ 18 per bushel. I believe China will regularly release beans from its very substantial State Reserve. The key to soybean prices lies in the hands of the China State Reserve. How much of their stocks they release between now and March 2013 will determine how high prices rise. Rationing of consumption in USA, EU and other countries will be relatively limited. In my analysis today, I am assuming a big expansion in acreage in South America in 2013, spurred by high prices. Soybean exports from Brazil will start earlier than usual and will greatly exceed previous years. The soybean crushing industry should look forward to a good season. Almost 45% of the 2013 Brazilian crop is said to have been sold already. One wonders how much of this has been signed up by Chinese importers and how much is in the hands of local crushers. Sunflower oil: Those of you who follow my papers will have noticed that from March at POC in Kuala Lumpur, I have been warning about the perils of expecting two bumper sun seed harvests in succession. Well it happened that way exactly. The current sunflower seed harvest in Russia and Ukraine is about 3.5 million tonnes lower than last year and we are likely to lose about 1 million tonnes of sunflower oil as a result. Despite these losses, sun oil production in 2012-13 will be quite high by historic standards (though lower than the record of 2011-12). I expect sun oil prices to remain in line with soya oil and to offer stiff competition to soya oil for markets in Iran, Egypt, parts of the Middle East and here in India. Rapeseed oil: Recent reports from Canada suggest some lowering of expectation for the Canola crop which is being harvested. Demand for canola seed and canola oil will remain strong from markets like China and USA. I expect rapeseed oil prices worldwide to go to a premium to soya oil in the near future. Speaking of rapeseed and mustard seed, I believe the forthcoming Rabi season


Cover Story in India should be good. With high prices, farmers will plant rape-mustard in a big way. If winter and spring temperatures remain normal, we can expect a very good rape-mustard crop in India for harvest in March. I endorse my friend Govindbhai Patel’s estimate that the Rabi Mustard seed crop is likely to reach 6.5 million tonnes if good weather prevails. It will be a shame if we have an excellent mustard crop and then mustard seed prices fall. That is why some protection to mustard farmers will be critical. I also believe India will have very good wheat production this Rabi season. Groundnut oil & Cottonseed oil: Worldwide, the production of Groundnut oil and Cotton seed oil will fall by about 350,000 tonnes. Lauric oils: Coconut oil production in Philippines and in Indonesia has recovered very well. Production of Palm Kernel Oil is also recovering very well. At origin, both these oils are trading below the price of palm oil. Philippines have already curtailed the import of Palm Olein and people are consuming more local coconut oil. This will take some time to resolve itself. I believe the over-supply of lauric oils will continue for several more months. DEMAND Will Brazil and Argentina raise their bio-diesel mandates? Bio diesel exports from Argentina will be pressured because the differential export tax benefit has almost been removed. This is a bearish development for soya oil prices FOB Argentina. Overall, we can expect Bio fuel demand to remain flat during 2012-13. Demand in USA will expand but elsewhere, the factor of Double Credit will ensure that vegetable oil used in bio fuels will grow by only about 0.5 million tonnes. The IMF and major investment banks are estimating world GDP growth at about 3 %. This may lead to edible demand rising by about 3 million tonnes. We can look at the Global Incremental S&Ds as follows : 000 tonnes Soya oil Rape oil Sun oil Gn oil & Cotton oil Palm oil Lauric oils Total Increase Demand

Oct 11-Sep 12 Oct 12-Sep 13 + 600 + 500 + 2,500 + 400 + 1,800 + 200 + 6,000 + 5,000

+ 800 - 300 - 800 - 350 + 3,200 + 500 + 3,050 + 3,500

It can be seen that the increase in world supply will more or less match the increase in world demand. Last year supply slightly exceeded demand and that is why my bullish forecast had to be abandoned. INDIA At POC in Kuala Lumpur I had forecast that Indian imports for the Oil Year Nov 2010 to October 2011 will be 9.475 million tonnes. I was wrong. Imports have turned out to be higher than I expected. This is partly due to Indian domestic crops turning out to be smaller than expected and the wide discount of palm in relation to domestic oils like mustard. Palm imports have exceeded expectations. I estimate Indian imports for 2011-12 will be about 10 million tonnes. For 2012-13, if we have good Rabi crops, the level of imports may remain around that same level. Consumption growth will be met by higher domestic production. India is also likely to end this current oil year with higher stocks than the previous year. As I said earlier, a massive Palm Oil Push is currently underway to boost shipments to India. This is the best destination for these palm oil shipments and therefore stocks in India as at the end of October as well as pipelines will be higher than previous years. Higher oilseed prices and the stronger turnover on domestic futures exchanges will make oilseed production more attractive. I am not covering Indian statistics in detail . . . Indian edible oil consumption has done well to expand despite the general rise in prices. This shows the resilience of the Indian economy and the strength of local demand. Indian Biting Point I am pleased to say that my concept

of the Indian Biting Point in terms of the wholesale price of RBD Olein has been largely vindicated. The evidence of the last 12 months suggests that the Biting Point is Rupees 60,000 and not higher. At that level per capita consumption expands and the demand for RBD Olein is excellent. When prices rise higher, the consumer tends to hesitate. We may have to raise the Biting Point for 2013 but I shall do so in my paper at POC in KL in March. Sustainable Palm Oil: The Round Table on Sustainable Palm Oil had a successful seminar in India recently and will make strides in the near future. They deserve everyone’s full support. PRICE OUTLOOK On the face of it, the soya complex looks bullish. On the other hand, prices are already very high and we must expect a strong supply response. We need big crops in South America as well as later in North America. We can expect big crops in Russia and the Ukraine too. The effects of the oncoming El Nino are another factor to consider. And above all we have a weak and dubious macro- economic outlook for the EU and the USA. What are the risks to ay price forecast today? Markets are so volatile these days and the effect of funds is so pervasive that we can never rely on fundamentals alone. My biggest worry is that of a stock market crash which can drag down commodity prices. When markets are in Liquidation Mode, nothing can stop the rout. On the other hand, crude oil prices could flare up for any reason and could lead commodity prices higher. I don’t think there is much risk of a period of strong economic growth with abundant creation of jobs and prosperity! There is also some uncertainty as to how legislators work in Washington

November 2012 SAARC OILS & FATS TODAY

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Cover Story after the Presidential elections. The much dreaded Fiscal Cliff could shake all markets regardless of the fundamentals. For the purpose of this analysis I am presuming Brent crude oil prices to trade in a range of US$ 85 to US$ 110. I am surprised at the strength of crude oil prices given the soft macro economy. There is too much Iran risk premium and people who indulge in cheap loose talk about bombing Iran should learn to keep their mouths shut. So with those caveats, I venture to make the following price forecasts Palm - I expect CPO futures on the BMD to decline further from current levels to a support level of 2600 to 2700 Ringgits for the 3rd position. This forecast is valid until December this year. I expect RBD Olein to trade around USD 950 FOB. I had said in June that the Export Tax structure in Indonesia can exaggerate upward and downward price movements. Based on this premise, I had said in June that there was a 20% possibility of CPO

futures declining sharply to 2300 Ringgits at some stage in the last quarter of 2012. Today, with the recent sell-off, I believe that possibility has increased to 50 %. We need to be vigilant. There seems to be a Phantom in the palm oil futures market who appears every afternoon and supports the market. We shall simply call him the Fantom spelt with an F. Much will depend on the activities of this Fantom and how deep his pockets turn out to be. Beyond December 2012, we shall have to wait and see the effects of the EL Nino to be able to forecast how prices are going to shape. Soybean oil - If bio diesel production in USA performs as expected or if soybeans climb back to levels higher than US$ 18, then the premium of soya oil over RBD Olein can expand, as I have been saying, to a maximum of US$ 320 per tonne. In that case Crude degummed soya oil can trade in a range of 1200 to 1300 FOB Argentina.

Sunflower oil: I expect Black Sea Sun oil to keep up the pressure on soybean oil. It will continue to trade at par or a slight discount to soya oil. Rapeseed oil: I expect Rapeseed oil prices to remain at a premium to soya oil. Lauric oils: I repeat I find the outlook for Lauric oils the bleakest. I expect coconut oil and palm kernel oil to trade at a discount to palm oil until December this year. Gradually local consumption will clear out the surplus and they will emerge again as premium oils. I must confess I am nervous about the outlook for the developed countries in the world. On the other hand I believe India has turned the corner and can now look forward to a period of strong growth and optimism. It is possible that 2013 will be India’s Year. However, India will have to curb her trade deficit and her budgetary deficit. It may well be a Ferrari Ki Sewari for India. (This was Dorab E Mistry’s address to 16th annual Globoil India Conference held in Mumbai)

Ankesh Sharma of Ruchi Soya gets Global Young Entrepreneur Award

A

nkesh Shahra has been felicitated with the Global Young Entrepreneur Award during the Annual Globoil Conference held in Mumbai. Ram Jethmalani handed over the award and citation to Ankesh Shahra. Currently based in Singapore, Ankesh is managing the international businesses for Ruchi Soya. It includes establishing a cross-commodity global trading platform headquartered in Singapore, as well as implementing Ruchi Soya’s backward integration strategy into agricultural plantations in Asia and Africa. Established in 1997 in India, Globoil – the Premier International Conference & Exhibition on Vegetable Oil, Feed & Feed Ingredients, and Oilseeds & Oleo Chemicals is an established annual feature and holds much value to the players in the vegetable oil trade and industry. Ankesh Shahra stated, “I am very grateful to the committee for their kind consideration, and I realise the responsibilities that this award carries and look forward to completing each and every one of them. Food security is indeed a prevalent global concern, and Ruchi is taking strategic steps towards ensuring competitive supply to India in the coming several years.” Ankesh has a background in Finance, Economics and International Trade, and represents the third generation of the Shahra family that started the business conglomerate

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November 2012

Ruchi Group having business interests across the sectors ranging from Edible oil and Soya foods to Steel, Dairy, Information technology, Realty and others.


Cover Story

Globoil Legend Award Acceptance speech – Nadir Godrej, Managing Director, Godrej Industries Limited

Globoil India Legend Award 2012: Being presented to Nadir Godrej, MD, Godrej Industries Ltd.

“This is indeed a special day When all my friends from SEA Are here at hand to hear me speak And your indulgence I will seek As I reminisce of times past. Alas! Good old days never last. But memories can still survive And events like this make them alive. Ardeshir Godrej was our founder You could not find someone sounder In spite of obstacles and blocks He pioneered safes and locks. And then he chose a wider scope He worked as hard in tackling soap. For many years he tried his hand Until he could well understand The ins and outs of making soap. To vegetarians he gave new hope. The other makers were all callow And made their soaps from lard and tallow. But thanks to his determined toil Fine soap could now be made from oil. My father was an engineer And like his uncle a pioneer. He never chose the beaten path Studied far from home and hearth. And not the normal US, UK

He boldly chose the German way. For years everything was fine But then of course came ‘39. The signs of war were in the air The British Consul told Indians there That it was time for them to go. My father had no way to know That he would have a longish break. In fact ten years it would take For him to get his PhD. But during those long years you see My father chose not to be placid But made good soap from fatty acid, The topic that he had selected And thus his thesis was perfected. But thanks to this twist in the plot Godrej Soaps gained quite a lot. In fact we went beyond just soap Now chemicals were in our scope. With food quite short there was no hope Of edible oils being used for soap, This breakthrough proved to be astute And thanks to this novel route Inedible oils were used for soap, Thus giving industry new hope. Between food and soap we were torn Solvent Extraction was then born. And Godrej also played a part

With groundnut first we made a start Rice bran then was added soon And this turned out to be a boon. I learnt all this at my father’s knee. First languages and geography Then dollops of oil chemistry. I accept this blessing gratefully. And equal guidance came from Adi And though by now he’s my best buddy, Back then he was a father figure. He looks quite young but please don’t snigger . He advised me on my education Then recalled me back to our nation As my studies went on and on. For six long years I had gone. All these years, I had been shirking’ But Adi had been busy working. Boldly he had taken charge Not just business but affairs at large. He led associations one by one. And started anew as one was done. And SEA he also lead Achieving much while at its head. At CLAFMA and at SEA Adi firmly led the way, Bought offices when they were cheap And all of us could therefore reap The benefits of this wise choice. And SEA has a strong voice. And Adi received this award And now’s my turn to be awed. But let’s move on from Adi’s glory And return to my own story. In the waning days of the emergency He called me with great urgency “Back here,” he said, “things are scary And look like getting much more hairy. I need YOU here right by my side.” I of course swelled with pride An academic life was spurned The perpetual student then returned. And very early I took the lead In the nascent business of making feed In good time we could make it grow.

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Cover Story And many of you may not know The way we stumbled into feed. For compound feed there was no need. Then Buhler sought out L & T Together they had tried to see If a market might exist There were no takers on their list They chose to make a clean swipe But they were left with a prototype A discount customer was sought And Godrej were the ones who bought; Serendipity and not a vision. . Thus gave birth to this division. Solvent extraction led us here And this is something I still cheer. But I think it’s rather sad . That when the times were very bad And solvent extraction we did exit And yet its puzzling that I’m here The irony is very clear. But when you think out of the box There never is a paradox. Perhaps the fact we left the core Made us appreciated more We let the others take the cake But the fruits of all their toil Is what we need, the meal and oil. And in these fields I lead the way In deciding how our group would play. By now you have a real feel Of the role that played in meal. On my fathers hunch we had invested In something strange and so untested As making Olefins from oil. It hardly seemed worth all that toil. But Alcohol was an intermediate Not Ethyl which gives an immediate Kick to all who do imbibe it. And for this audience I’d describe it As chain length 12 to 18. And now this change in tack would mean A change in all our Strategy And it was largely up to me To clean up the entire mess And it was tough I must confess. But when you have the perfect teams

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The impossible also seems :Like a stroll in the park Though sometimes strolling in the dark! And at the end of this turmoil My businesses used meal and oil. And for as far as I can see Now R&D will be the key. For every problem that we face A program should be put in place. The populace should benefit And business targets should be hit. Imports of oil are quickly soaring But we, I think, should be exploring New ways of producing oil Right here. on our Indian soil. Palm Oil’s already on the way. More trees are planted day by day. But farmers always have to choose And they are scared that they might lose If they commit to the Oil Palm tree And some years later they then see That prices have begun to fall. You see for them it’s a tough call. Export duties have been hiked The price we pay has duly spiked. Perhaps we should retaliate An import duty would be great. Ten per cent on CPO Would raise funds that could then go To increase the domestic flow. And in a nod to RSPO For imports that are certified A small concession could be tried. Now com yields here are very high So there is something we could try. We could try and modify By making oil and protein high A new oilseed could soon be born Varieties of high oil corn. Though it has not met the goal, Jatropha could still playa role. The yields have been much enhanced The time to fruiting has advanced. The toxicity has been reduced And if in India it is produced With biodiesel borne in mind

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I’m sure that everyone will find That oleochemicals could use it too And that’s indeed what we will do. The first few steps have now been taken But we should not be mistaken Much more remains for us to do. After all these years I’m quite tired But this award has me inspired. With lots of thought and lots of toil, We’ll make enough of our own oil. And very humbly I do ask All to join me in this task. My special thanks to Kailash Singh, Globoil’s undisputed king. For the pizzas and all the bling That only Kailashji can bring To all-of us year after year. And he deserves a special cheer! And special greetings I’d like to send To Sushil Goenka, my good friend, And to all of us in industry Who jointly worked to quickly see That tariff value was market based Overcoming the crisis that we then faced. To Vijay Data salutations And heartfelt congratulations! But one thing that we well know Is Presidents just come and go And someone else must hold the fort. And a real hero should be sought And we could never find one better Than our own dear Dr. Mehta. For his friendly, can do attitude I bow in deepest gratitude. I thank Dorab for the extra gloss When introduced as his boss. He’s really gone very far And become quite the star! Of course it would be very odd, Not thanking family or God. But most of all a big thank you To each and every one of you. I am humbled and I am awed At receiving this Award. (The author revels in making speeches in verse from)


Cover Story

Oilseeds need to replicate success in food grains – Dr. D. Bhalla, Jt. Secretary, Ministry of Consumer Affairs, Food & Public Distribution, Govt. of India

will agree with me, cannot be termed as stagnation but certainly not a great rate of growth over a decade. Besides, there are notable advances in production of cotton and Rice, and soybean which too contribute about 1.5 million tonnes of vegetable oils. The thrust is continuing.

Dr. B. V. Mehta, Executive Director, SEA; Vijay Data, President, SEA presenting memento to Dr. D. Bhalla (R), Jt. Secretary, Dept. of Food & Public Distribution, GOI

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ndia’s vegetable oil sector is indeed in a situation having several dynamic aspects. First, there was a perception about adverse impact of Indian monsoons on oilseeds production during the current year. We began the season with a delayed onset of monsoons, but as l stand before you, our rainfall has caught up and it now 95% of normal. The situation has been improving by the day. Some of the metrological sub-divisions with deficient rainfall, like Punjab, Haryana and West UP have access to irrigation facilities. Therefore, on the ground, things may not be as bad as have been feared. Next, there was the fear of EI Nino manifesting itself, with doomsday forecast of early withdrawal of monsoons. First, during July, when that did not happen, the expectation shifted to August and now to September. Three weeks of September too are over with normal to excess’ rain fall in most parts of India. Consequently, the area under oilseeds has crossed 17.5 million hectares which is normal for this time of the year. Likewise, the area under cotton and rice, which are also important sources of vegetable oil, is in excess of normal at this time of the year. While not attempting to present an estimate of oilseed crops, I can definitely share my optimism of good outcome with you. The conventional wisdom is that oilseeds production is stagnant. As a matter of fact, a growth of 50% over the past decade has been achieved, which, you

Infrastructure development Priority is being accorded to development of infrastructure and communication in rural areas; new regulations are in place in respect of warehousing to upgrade the facilities and enable financing against warehousing receipts, which holds the prospect of removing limitations in efficient marketing. Resilience of Indian agriculture, particularly of rain-fed agriculture, like in the line of oil seeds is steadily improving due to developments in the areas of watershed management and protective irrigation. We need to build on these advantages and strengths. In spite of these strengths, our selfsufficiency is at the level of 45%. We import about 9.5 million tones of vegetable oils. The rate of growth of our consumption is higher than the rate of growth of production. Our per capita consumption of edible oils stands at about 13.5 kg. It compares poorly with the global average of 26 kg. Not only our per capita income is rising, the income inequities too are reducing. These are exerting an upward pressure on consumption. Our per capita consumption has been growing at about 3.5% per annum. Demand projection Projections of demand prepared by the industry place the estimate of edible oil demand by the year 2020 at 23 million tones from a level of 16.5 million tones at present. That is just eight years away. Therefore the imports of edible oils could rise very significantly from the current level of 9.5 million tones. Availability of edible oil in adequate quantity is linked to food security because of it being essential element pf nutrition.

I am confident that our scientists, technologists and the industry will rise to the occasion to improve the productivity and reduce the deficit. India has had many success stories. We have become self-sufficient in food grains and structural exports of rice from a ‘ship to mouth’ existence. Similarly, we have become largest producers of milk. We have had a significant increase in cotton production tuning India into a structural exporter of cotton. I have no doubt that the developments can be replicated in the case of production of oilseeds as well. Our oilseed crushing industry, in part, comprises of mechanical expellers and ghanies to address the consumer tastes and preferences, particularly in case of mustard, sesame and groundnut oils. No doubt that the oil left in oilcake is almost entirely extracted through subsequent solvent extraction process. Most of our solvent extraction units, which are engaged in soybean and rice bran processing, are of global standards in terms of efficiency parameters. Open to suggestions In response to industry’s demand, the Government has recently aligned the tariff value on which import duty is levied incase of refined bleached and deodorized palmolein to current values. I am informed that the step had a salutary impact on increase in domestic capacity utilization. We are open to considering favourably any further suggestions for development of oil seeds processing as well as vegetable oil refining industry. In fact, government is considering to enhance significantly the exports of coconut and sesame oils and export of branded packs for Indians living abroad. The proposal of the industry for allowing Indian refiners to participate in supply of palmolein oil and soya oil to PDS is being considered. The industry’s demands regarding “acid value” & “melting point” are with FSSAI for favourable consideration and assurance .that Government is ready to do all for the growth of the edible oil industry and would like to see the increase in per capita availability and fair retail prices of edible oils. n

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Sea Meet

SEA’s 41st Annual General Meeting

A challenging & rewarding year – Sushil Goenka, outgoing SEA President

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review of the oilseeds sector during Kharif 2012 would reveal that the dark clouds of anxiety hovered over the country from the beginning of the sowing season itself. The Southwest monsoon normally sets in Kerala by 1st June, and spreads over the country in about a fortnight’s time. However, almost all oilseed-growing areas in the country remained virtually dry throughout the month of June 2012 thereby seriously affecting sowing. Rains in July 2012 were scanty, though July is normally the wettest month of the monsoon season. However, there was significant improvement in the rainfall, especially during last week of August and early September. Based on the progress of sowing, in mid-September, the total area sown under oilseed was about 171 lakh hectares as compared to 177 lakh hectares sown last year. Prospects of harvesting a good oilseed crop improved. The most redeeming fact is that the late rains in Rajasthan and North India will help Rabi crop prospects and let us hope that whatever shortfall in oilseeds we have in Kharif, would be compensated for in Rabi season. Our farmers then would be able to say, with a genuine smile on their face, ‘All is well that ends well’. During the last year, as per Government’s estimate, the total production of nine major oilseeds was 300.1 lakh tonnes compared to 311.0 lakh tones in 2010-11. However, we in the trade estimated the production of the nine major oilseed crops at a much lower figure of 260.2 lakh tones against 254.4 lakh tones in 2010-11. The overall availability of domestic oils during

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2011-12 is estimated to be at 81.24 lakh tones against 85.23 lakh tones during the previous year. Vegetable oil imports in the first ten months of the oil-year 2011-12 is estimated at 81.6 lakh tonnes as compared to 68.6 lakh tonnes during the same period last year. The total vegetable oil import during 2011-12 oil-year is likely to be in the range of 96 to 98 lakh tonnes against 86.7 lakh tonnes during the previous oil year. For the oil-year 2011-12, India accounts for 8.05% of world’s oilseed production; 7.28% of world’s oilseed crushing; 6.77% of world’s meal production; 6.52% of world’s meal export; 4.91% of world’s meal consumption; 5.25% of world’s oils production; 10.21% of world’s oil consumption and 13.60% of world’s oil imports. During the year 2011-12, exports of all oilmeals increased to 56.1 lakh tones valued at about Rs.8,500 Crores against 51.8 Lakhs Tonnes valued at Rs.8,300 Crores, the year before. Some Important developments and issues affecting the Vegetable oil Industry and steps taken by the Association to counter them are as follows: : Tariff Value Revision The inverted export duty structure set by the Government of Indonesia wherein RBD Palmolein has the lowest export duty and CPO the highest, led to a flood of import of RBD olein into India. The Association pursued with the Government of India actively, to revise the tariff value for import of edible oils to the current market price, a practice that was being followed until March 2008.

November 2012

It is heartening to mention that the association’s continuous efforts and persuasion has at last yielded positive results. The Government revised the tariff value on RBD olein to US$ 1053 from US$ 484 per M.T. on 31st July 2012 and this is now being revised every fortnight, linking it to the market price. This step of the Government was very much welcomed by the Industry. The Association has represented to the Government once again to revise the tariff value for all oils being imported into India, in order to curb loopholes, if any. There is an urgent need to revise the tariff value on Refined Palm Oil, as this oil has started arriving into the country, due to the favorable, old tariff value. I am confident that this will be done shortly. Import of Oilcake at Nil Duty The Department of Animal Husbandry & Dairying, on the insistence of the Government-owned Dairy corporations, has repeatedly pressed for ban or imposition of a high export duty on oilmeal exports. SEA with the cooperation of other like-minded Associations was able to impress upon on the Ministry of Agriculture that such a move would prove counterproductive as the country would consequently face a decline in production oilmeals and also edible oils. I am pleased to inform you that the Government has accepted the suggestion made by the Association to allow duty free import of oilcakes to increase the supplies. With effect from 21st August, 2012 up to 31st March 2013, duty free imports of Groundnut Oilcake, Sunflower cake, Canola cake, Mustard cake & their meals and also soybean meal are now being allowed. The Association


Sea Meet has represented to the Government to also allow import of copra cake; palm kernel cake & also rice bran at nil duty. This matter is being pursued actively. Export of Rapeseed Meal to China As you are aware, China has banned import of rapeseed meal and other oilmeals from India with effect from 1st January 2012, due to the detection of malachite green contaminant in the Rapeseed meal exported from India. The Association and the Export Inspection Council of India undertook a Technical Survey jointly during December 2011 to identify the cause of the contamination. It was concluded that the contamination was due to Malachite green dye used for marking of the jute bags. The Association has since issued an Advisory to its members, other stake holders and the entire supply chain to discontinue usage of malachite green dye for marking and also, to avoid usage of old jute bags having green dye marking. The Association is also pursuing actively with the Chinese authorities to lift the ban on import of Rapeseed meal and other oilmeals from India. Waste from RBO refining Supreme Court Judgment places waste from RBO Refining under Excise Duty A large number of members had not been levying and paying duty of Gums, Waxes, Fatty Acids and Soap stocks arising during the manufacturing of Refined Vegetable Oil claiming that the same are exempted by virtue of Notification No. 89/95-C.E., which exempts ‘waste, parings and scrap’ arising in the course of manufacture of exempted goods in factories which are not manufacturing any other excisable goods in the same factory. The Bangalore Bench of the Hon’ble Tribunal had decided the issue in favour of the industry. But later on, Delhi Bench of the Hon’ble Tribunal has decided the issue against the industry. In view of this conflict of decision, the Association has made a representation to the CBEC for issuing of notification under Section 11C of The Central Excise Act, 1944 for waiving the past liability and also for issuing a clarification under Section 37B of the Act to the effect that the industry is eligible for availing benefit of exemption Notification No. 89/95-C.E. Ban on Exports of Edible Oils in Consumer Packs The Government had banned exports

Globoil India Man of the Year 2012 Award: Presented to Mr. Sushil Goenka, Director, Foods Fats & Fertilisers Ltd.

of all edible vegetable oils in the year 2008 but later allowed export of 10,000 tonnes of edible oils in consumer packs which enabled the industry to serve the niche market of Indian expatriates. Unfortunately, DGFT abruptly stopped the export of edible oils in consumer packs w.e.f 1st August 2012 stating informally that the ceiling of 10,000 tonnes has been reached. The Association has requested the Government to consider allowing an additional quantity of 10,000 tonnes of edible oils in consumer packs for the period 1st August to 31st October 2012 and raise the overall quota to 25,000 tonnes for next year.

nine Member SEA trade delegation to Bangladesh from 8th to 12th July for promoting & exploring new market for oilmeals. Fruitful meetings were held with feed millers, importers & suppliers of feed ingredients, enabling better understanding of the present & future requirements of various oilmeals, both in terms of quality and quantity.

India Product Show in Yangon, Myanmar Indo Myanmar Chamber of Commerce and Industries organized an “India Product Show” in Yangon, Myanmar, from March 23 to 25 this year, with the support of Indian Embassy in Yangon. The objective of the Exhibition was to promote Indian Products in Myanmar by displaying & selling India Products in the Exhibition to the public & traders. Our Association actively participated in this Trade show. Pravin Lunkad, Hon. Secretary, and Dr. B. V. Mehta, Executive Director, SEA represented the Association in this India Product Show to create awareness about India’s capability of being a reliable and quality conscious supplier of various oilmeals for cattle and poultry feeds.

Vegoils Contracts & Arbitration Seminar Understanding and abiding by the International Contracts of Trade is the backbone of the export and import trade. To provide in-depth understanding of FOSFA Terms and Contracts, the Association & FOSFA had jointly organized SEA - FOSFA Vegetable Oils Contract & Arbitration Seminar in Mumbai on 6th & 7th December 2011. The seminar proved to be very beneficial to members having direct or related interest in International Trade in vegetable oils. I would like to conclude with the following quote from George Bernard Shaw: “Life is no brief candle to me. It is a sort of splendid torch which I have got a hold of for the moment, and I want to make it burn as brightly as possible before handing it on to future generations.” n

SEA Delegation to Bangladesh The Association strives continuously to explore new markets and strengthen trade relations with existing International buyers. With this objective, I led a

SEA Website The Association strives to be in the forefront of technology usage to provide quality service to its members. Our Association has revamped its website (www.seaofindia.com) and automated many tasks for providing faster services to the members and other users.

More on P 32......

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Pre-Event

OTAI (WZ) to Organise 67th Annual Convention, Conference & Expo

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TAI-Western Zone is organizing a 67th Annual Convention and International Conference & Expo on latest Development in Vegetable oil processing during November 23-24, 2012 in Mumbai. The conference will have eminent speakers from India & Abroad and they willspeak on latest developments in Technology of processing of vegetable oil.The conference offers the ideal location and occasion for professionals togather,share and learn from colleagues from around the world. A souvenir will be published on

this occasion consisting ofinformative and valuable technical presentations of the conference.Thissouvenir will give a unique opportunity to publish the profiles ofindustry and their professionals. Along with the conference there will be an exhibition of processing equipments and technology. The exhibition will be open to all delegates andvisitors of conference and will provide superb opportunity for companies topromote their products and services to the worldwide oil and fat industry.

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There are exclusive sponsorship opportunities Satish V Khadke, Convener available for industry giving your company the chance for extra promotion depending on your budget. We are looking forward to a large turnout, exceptional technicalprogramme,great meetings and social events.Delegates are certain to bringhome value-adding ideas for their organizations.

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umbai, the financial hub of the Country has been chosen for staging 67th th Annual Convention of Oil Technologist’s Association Of India and International Conference & Expo – 2012. The theme of the Seminar is Latest Developments In Vegetable Oil Processing. At a time when over 50% Country’s requirement of the Vegetable Oil is met from import and also at the time when the vegetable oil cost is at an all time high, some serious thinking and deliberations on latest developments in vegetable oil processing are only natural. Oil Technologist’s Association Of India, Western Zone has been working diligently to make this Conference highly informative and enjoyable. On behalf of the Steering Committee and my personal behalf, I invite you to actively participate in this conference.

estern Zone of The Oil Technologists’ Association of India (OTAI) has the proud privilege to host the 67th Annual Convention of OTAI. A two day International Conference & Expo 2012 is planned along with the convention on November 23-24’ 2012 at ITC Maratha, a luxury collection hotel, Sahar Airport Road, Mumbai- 400 099. The theme of the conference is Latest Development in Vegetable Oil Processing. Vegetable Oil is a very important constituent of food for a healthy life of individuals. While around five million tons of vegetable oil is produced in our country, the present estimated demand is over ten million tons and the demand is on constant rise. Dependence on imports to meet the essential requirement of food is of grave concern and OTAI-WZ recognize the situation and to address the situation the conference is being organized. The Vegetable Oil Processing industry and the plant and machinery manufacturers should come on this common platform to find a solution. On behalf of OTAI-WZ and on my personal behalf I invite one and all associated with the Vegetable Oil Industry to participate in this conference.

N.B. GODREJ, CHAIRMAN - STEERING COMMITTEE

M.K. JANARDAN PRESIDENT-WZ

SAARC OILS & FATS Today

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Sea Meet

SEA presents awards to the highest processors/exporters

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he Solvent Extractors’ Association of India (SEA) held its general annual meeting and annual awards function on September 21, in Mumbai. Awards were presented to the highest processors of oilcakes/rice bran/minor oilseeds, highest exporters of oilmeals and highest producer of refined rice bran oil for the year 2011-12. Prof K V Thomas, Minister of State for Food, Consumer Affairs and Public Distribution, Government of India, was the chief guest and gave away awards. Over 800 members, foreign delegates, officials from various ministries attended this event. Award Winners List Highest Processors

Rapeseed oilcake: Karnani Solvex Pvt Ltd (Jaipur), Gokul Refoils & Solvent Ltd (Gujarat)

Castorseed Extraction: Jayant Agro Organics Ltd. (Jamnagar), Gokul Refoils & Solvent Ltd (Gujarat)

Groundnut Oilcake: Rajesh Oil Industries Pvt Ltd (Gujarat), Rajkot Oilcake Pvt Ltd (Gujarat)

Groundnut Extraction: Silver Proteins Pvt Ltd (Jamnagar), Friends Mercantile Pvt Ltd (Kutch)

Neemseed: Shri Ram Solvent Exts Pvt Ltd (Uttrakhand)

Compound (cattle/poultry) Feeds: Krishna Traders (Kolkata)

Castorseed Oilcake: AWN Agro Pvt Ltd (Gujarat), Gokul Refoils & Solvent Ltd (Gujarat)

Kokum Oil (Fat): Pranav Agro Industries Ltd (Pune)

Copra Oilcake: KSE Ltd (Kerala), Chakkiathmooda Extractions (Kerala) Highest Exporters

Rice Bran: Ricela Health Foods Ltd (Dhuri, Punjab), Vaighai Agro Products Ltd., Madurai

Ricebran Extractions: Hemraj Industries Pvt Lts (Kolkata), Pragati Agri Products Pvt Ltd (Kolkata)

Sunflower seed oilcake: M K Agrotech Pvt Ltd (Karnataka), Abhishek Solvent Exts Ltd (Karnataka)

Rapseed Extraction: Gokul Refoils & Solvent Ltd (Gujarat), Friends Mercantile Pvt Ltd (Kutch)

Neemseed Oil: P J Margo Pvt Ltd (Bangalore) B.K. Goenka SEA Awards for Refined Rice bran Oil Ricela Health Foods Ltd (Punjab) BCL Industries & Infrastructures Ltd (Punjab) AP Organics Pvt Ltd (Punjab)

SEA announces date of 11th Global Castor Conference

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he Solvent Extractors’ Association of India (SEA) has announced the 1th International Conference on Castor viz. Global Castor Conference – 2013 to be held on 23rd February 2013 at Hotel Courtyard by Marriott, Ahmedabad, Gujarat, India. The Global Castor Conference is being supported by number of reputed National Exchanges & Organisations connected with the Castor business and International Castor Oil Association (ICOA), U.S.A. India meets more than 80% demand of Castor oil thereby enjoying dominant position in the World Castor Scenario. India’s exports of Castor oil and derivatives are estimated at over Rs. 4000 crores (US$ 850 million) per annum. The global castor derivatives market estimated to be over US$ 1.2 billion is highly dependent on India. SEA in its attempt to bring the Castor fraternity together, is organising this International Conference every year to deliberate and focus on the issues before the Castor Industry and also to arrive at the solutions by fruitful interactions with the eminent speakers and panel members from India & abroad. This 11th International Conference will also provide a unique opportunity for open discussions & exchange of

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views about the issues pertaining to Castor business, to find solutions to the problems faced by the manufacturers, importers & exporters, technologists, players from the commodity exchanges, brokers & dealers of Castor business all over the world. Global Castor Conference – 2013 will have the unfolding of the latest status of Indian as well as Global Castor Oil Scenarios by the eminent personalities from the Castor fraternity. Also as in the past, it will feature a presentation on the findings of Castor Crop Survey-2012 conducted in key Castor growing States viz. Gujarat, Rajasthan & A. P. by the world renowned market survey agency, M/s AC Nielsen. This will be followed by the Panel discussion on `Castor Oil Price Outlook-2013’ by the eminent speakers from the Castor business & trade both from India & abroad. The Conference will have over 300 Delegates & Special Invitees from all over India & abroad and will provide unique opportunity for one-to-one meeting for the delegates, specifically with the international buyers of Castor Oil and Derivatives to develop new business contacts and also to strengthen the existing ones.


Event Report

Eurasia & Animalexpo 2012

592 participants from 50 countries gather to grab opportunities

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groexpo Eurasia International Agriculture, Greenhouse and Livestock Exhibition, Animalexpo International Livestock Technologies and Dairy Industry Exhibition were held on 20-23 September, 2012, at İzmir International Fair Center, Turkey. This was the 8th edition of Agroexpo Eurasia and 4th edition of Animalexpo Agroexpo Eurasia International Agriculture. The concurrent event was Greenhouse and Livestock Exhibition which has the distiction of being the first choice of exhibitors of Europe and nearest regions. It is also one of the largest International Agriculture shows of Turkey. The popular events, attended by top names of industry, were inaugrated by vice president of CHP Gökhan Günaydın, commission member of Agriculture, Forestry and Rural and AKP Izmir constituency deputy Ali Aşlık, CHP İzmir deputy Mehmet Ali Susam, İzmir vice governor Mehmet Suat İlhan, Vice President of Izmir Metropolitan Municipality Vekili Sırrı Aydoğan, Izmir Food, Agriculture and Livestock Provincial Director Ahmet Güldal, Chairman of İzmir Agriculture chambers province Coordination Council Süleyman Yeşil, chairman of the board of Orion Fair Fatih Tan. The Agriculture and Livestock city of İzmir, which is hosting this big event, attracted great attention from Turkish farmers, farm owners and industry professionals, and thousands of visitors.

The Fair, which was visited by 126812 people, has an exhibition area of 45,000 m2. Tractors and spare parts, greenhouse, seed, seedling, seedlings, fertilizer, pharmaceutical industry, irrigation and the plastics industry, animal husbandry, livestock production machinery, veterinary services and animal health companies were the participants at the fair. There were 592 participants from 50 countries. More than 40 trade missions from India, Kazakhstan, Serbia, USA, Holland, Russia, Canada, Bulgaria, Greece, Cyprus, Egypt, Iran, Pakistan, Senegal, Ethiopia, Armenia, Romania, Spain, Italy, Australia, Ukraine, Ghana, Morocco, Algeria and Latvia visited the fair to be part of the on-the-spot opportunities. Local Products Local Products Exhibition held in an open area with field of İzmir Agriculture and Livestock Fairs would leave longlasying impression. Promotion of local products which were specific to İzmir, was made to the all visitors at the stands held by İzmir Food, Agriculture and Livestock Managements, Chambers of Agriculture, District and Sectoral Cooperatives. Cattle and Ovine Cattle and Ovine Livestock Exhibition was also a big hit at Izmir. There were bulls, heifers, cows, Saanen goats, gum, sheep, goats, cattle and sheep. They were

There were 592 participants from 50 countries. More than 40 trade missions from India, Kazakhstan, Serbia, USA, Holland, Russia, Canada, Bulgaria, Greece, Cyprus, Egypt, Iran, Pakistan, Senegal, Ethiopia, Armenia, Romania, Spain, Italy, Australia, Ukraine, Ghana, Morocco, Algeria and Latvia visited the fair to be part of the on-the-spot opportunities exhibited by Izmir Sheep - Goat Breeders Association , Cattle Breeders Association of Izmir, Turkey Cattle Breeders’ Association. Sectoral Information Seminars During the fair, ‘The Importance of Organic Farming Natural Zeolites as Entry / New Approaches for Ovines Nutrition, Composting and its Benefits, Business Blindness, Acidosis, Transformation of Animal Wastes to Fodder, Early Lactation in Cattle Feed, Calf diarrhea, Nutrition and Care, Introduction of Eti Bor Mining and Usage Mining in Agriculture, Electronic Identification and Professional Herd Management, Organicul-I Microbial Fertilizer, Animal Farms insects – Importance of Struggle with horn flies and Importance of Laboratory Diagnosis in Animal Diseases, and Livestock Breeding topics were discussed by the experts. n

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New Variety

Dhiraj 101

A groundnut variety that needs less water – M J Prabu Gujarat, is credited with developing a new groundnut variety named “Dhiraj 101,” which is resistant to stem rot.

Dhirajlal Thummar in his groundnut field

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t is natural for farmers to invariably go in either for a change in their cropping pattern, or in some cases, even stop farming when their crops fail. But it is only a few determined ones who try to find the root cause of the problem and overcome it. Dhirajlal Virjibhai Thummar, a groundnut farmer from

Maturity period The crop matures in 95-105 days and bears 35-40 pods per plant. About 90-100 kg of seeds are required for sowing in an hectare. Groundnut cultivation is a major source of income for many farmers like me in this region. With five wells and a borewell, our fields are well irrigated. “I also grow cotton (BT varieties), sorghum, wheat and vegetables. Sorghum is grown primarily for the cattle, and vegetables for our own consumption,” said the farmer. In the year 2004 he sowed GG-20 groundnut variety and the whole crop got infested resulting in wilting and almost complete

failure of the crop. Any other farmer would have become depressed but not Dhirajlal. He identified a few plants, which did not get affected by this disease. Believing that these may contain some inherent property that makes them stem rotresistant, he harvested and kept the seeds of these plants separately. The farmer sowed the seeds separately in the next season and continued the screening and selection for three consecutive years. Finally he obtained plants that were free from stem rot and wilt. At 3,200-3,500 kg per hectare, the yield is higher than locally cultivated varieties in the region. Oil content The oil content is also higher —

How to deal with thrips menace in groundnut

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n the recent past, thrips menace has drastically increased on groundnut crops grown all over Tamil Nadu. Thrips are small insects and they appear on groundnut crop both in vegetative and flowering stage. Female lays 60-70 single eggs into young tissues of the plant. The nymphal and pupal periods last five days each. The adults are pale cream in colour. They are soft bodied and have highly fringed wings. Unique feeding The thrips desap the plant with their unique feeding apparatus and also transmit the deadly bud necrosis virus that impedes plant growth. Nymphs and adults tear the surface of the leaflets and suck the

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oozing sap resulting in white patches appearing on the lower surface of the leaves and distortion of young leaflets. The injury results in development of dull yellowish-green patches of the upper leaf surface and brown coloured (necrotic) areas on the lower surface. Severe infestations cause bronzed appearance of leaf with curling and stunting of plants. High temperature with low rainfall favours multiplication and transmits groundnut bud necrosis virus. Management methods Uproot and destroy severely infected plants. Remove the alternative host plants. Mulching would check the damage during the early stage of the

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plant. Setting up of blue sticky traps at rate of 12 per hectare in the field will check the thrips population. Apply safe chemical insecticides at recommended doses only if the population crosses 10 thrips per plant. Application of ecofriendly pesticides viz., neem oil or pungam oil at 2ml/ha will be very effective. Spraying of fipronil 5 per cent SC at 1.500-2.000ml/ha or thiacloprid 21.7 per cent SC 125ml/ha or thiamethoxam 25 per cent WG at 40g/ha or dimethoate 30 EC at 2 ml per litre of water at 25, 45 and 60 days after sowing will protect the crop from thrips menace. (The authors are V. Radhakrishnan, Asst. Prof, Agricultural Entomology, N. Sathiah, Prof and Head Oilseeds research station, Tindivanam, TNAU,Tindivanam)


New Variety 42-45 per cent — according to him. This variety performs well when the monsoon is average as well as in less irrigated conditions. To promote good crop growth, Dhirajlal used only herbal pesticide such as neem, kidamari (Dutchman’s Pipe), tulsi (Holy Basil) and akda (swallow-wort) for controlling insect pests and diseases. He also distributed seeds to farmers in Amreli, Rajkot and Bhavnagar districts of Saurashtra regions. He received encouraging feedback about the variety’s ability to grow well, remain free from wilt and rust diseases, and also yield well. Usually before harvest farmers irrigate the fields and then pull out

the plants. During pulling, the pods get broken from the roots and remain under the ground. The problem is not encountered with this variety as it bears pods that are stronger and grow at lesser depth under the soil. Soil conservation “Soil conservation and crops that require less water are urgent needs for farmers to keep agriculture sustainable in changing climatic conditions,” said Dhirajlal. Professor Anil Gupta, vicechairperson, National Innovation Foundation said, “Many technical innovations have been centred on

groundnut crop in our country. There is an urgent need to invent and popularise crop varieties, which require less water and have more productivity and at the same time are affordable to farmers.” Helping hand NIF facilitated the field trial of ‘Dhiraj101’ at the Oil Seed Research Station, Junagarh. The report mentions that it is resistant to stem rot as well and its production is 1.5 times more than a local variety ‘GG-20’. It performs well even in when monsoon is average and requires less irrigation. This variety matures eight to ten days earlier and also has more average oil content. n

India’s edible oil imports to touch 10 MT

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ndia’s edible oil imports have hit an all-time high level this year as consumption grows faster than production. During the 11 months period from November 2011 to September 2012, import of edible oils has already touched 8.96 million metric tonnes, which is perhaps the highest ever. It may be noted that for the edible oils sector the marketing year is from November to October every year. With the addition of October month’s imports, the full 12 months from November 2011 to October 2012 will take the total year’s imports close to 10 million metric tonnes. “Higher imports are not surprising, considering the fact that Indian production is unable to keep pace with strong demand from domestic consumers. Imports may go up even further next marketing year as there is likely to be a negligible growth in domestic oil supply. For the marketing year ending October 2012, India’s total edible oil imports is expected to be just a little under 10 million metric tonnes,” said Raju Choksi, Vice President (Agrocommodities), Anil Nutrients Ltd, a subsidiary of the Rs 650 crore plus agro and food processing major Anil Ltd. Malaysia top exporter Malaysian palm oil exports to

India will touch a record high of over two million tonnes in calendar 2012. The export duty cut announced by Malaysia from January 1 may prompt India to buy more from the secondlargest palm oil producer next year. “India is a traditional market, where palm oil exports are growing fast. We expect our exports to cross two million tonnes this year” said Lee Yeow Chor, Chairman, Malaysian Palm Oil Council (MPOC). He was speaking on the sidelines of Malaysian Palm Oil Trade Fair and Seminar 2012, organised by MPOC, on Monday. Till September-end, the Malaysian palm oil exports to India registered a 58 per cent growth at 1.84 million tonnes (mt) over 1.11 mt in the corresponding period a year ago. In 2011, exports stood at 1.66 mt. Exports have doubled in the past five years. B.V. Mehta, Executive Director, Solvent Extractors Association of India, expects further rise in Malaysian oil palm shipments to India next year on duty cuts and abolition of quotas. “The move will benefit buyers in India as it will give them an opportunity to evaluate where they will get a better price. This is provided Indonesia does not change its present duty structure,” Mehta said. India currently buys 20 per cent of its requirement from Malaysia and the rest from largest producer Indonesia.

“We expect that ratio to change going forward,” Mehta said. Malaysia is looking at traditional large buyers such as China and India to drive its exports as its palmbased products face negative labelling in countries such as France. The non-governmental organisations in Europe and Australia have stepped up campaign against palm cultivation on environmental grounds. Terming the stance adopted by Europe and Australia as an unfair trade practice, Malaysian Minister for Plantation Industries and Commodities Bernard Dumpok said that his Government is looking to get into a dialogue and strengthen the existing partnership with these countries, especially France. “Though the prices are not upbeat over the past few weeks, demand is quite strong” said Dumpok. Palm oil prices, which have crashed by about 30 per cent in the past few months, have led to an inventory build-up in Malaysia. The country had stocks of 2.48 mt as of end September and its storage capacity stood at 5.2 mt, Dumpok said.

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News

Amul launches full cream buffalo milk in Delhi-NCR

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ujarat Co-operative Milk Marketing Federation (GCMMF), which sells dairy products under the popular Amul brand, has recently launched full-cream buffalo milk in poly-pack in Delhi-NCR under the brand name “Amul Diamond”. Amul Diamond will be sold at a price of Rs 45 per litre. “This new product will attract customers who are buying loose buffalo milk and help them shift to

processed and pasteurised Amul Dimond full cream milk,” GCMMF Chairman Vipul Chaudhary told reporters after the launch of the new product. Amul Diamond, which is targetted at customers looking for more creamy milk, would have 7 per cent fat content and 9 per cent solid-non-fat, he said. Amul is the market leader in DelhiNCR’s pouch milk market with daily sales of 24 lakh litres. It is selling milk under the brands -- Amul Gold full cream with 6 per cent fat , Amul Taaza tone milk with 3 per cent fat and Amul slim-n-trim double tonned milk with 1.5 per cent fat. Observing that demand for creamy milk in Delhi is growing, GCMMF Managing Director R S Sodhi said, “Rich consumers at afford this premium category full-cream milk. We expect sales

of this new product to be atleast 2.5 lakh litres per day initially.” Total demand for packed milk in Delhi is currently around 50 lakh litres per day and is expected to touch 90 lakh litres per day by 2020, he said. Sodhi said “Amul Diamond” would also be launched in Gujarat on October 25 and subsequently plans to sell in other parts of the country. The Federation is aiming to to achieve sales of Rs 14,400 crore in 2012-13, he said. GCMMF’s present processing capacity in Delhi-NCR is 10 lakh litres per day and has added additional 30 lakh litres per day recently. Amul currently has around 6,500 outlets selling various items, including dairy and frozen products. Its main competitor on the milk segment is Mother Dairy.

Bihar too interested in buying DMS

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fter Amul, Bihar State Cooperative Milk Producers’ Federation (COMFED) that owns Sudha brand today evinced interest in acquiring processing and distribution units of the loss-making DMS on rental basis. Delhi Milk Scheme (DMS), which comes under the Agriculture Ministry, has been running losses for the past several years. As a result, the ministry has moved a cabinet proposal for corporatisation of DMS. “DMS has processing units and large network of booths. As we have expanded our business in Delhi, we are definitely interested to take DMS assets on rental in case the Centre plans to do so,” COMFED Managing Director Harjot Kaur said at the launch of its brand in the national capital region (NCR)

The COMFED, which has a processing capacity of 13.6 lakh litres per day in Bihar, will submit a fresh proposal and negotiate on the DMS issue as and when the Centre decides to corporatise it, she said. Kaur further said COMFED had earlier received a proposal from DMS for selling ‘Sudha’ milk and milk products through its outlets in the NCR. “But the

deal fell through as DMS wanted to sell under its own brand,” she added. Amul, owned by the Gujarat Cooperative Milk Marketing Federation (GCMMF), has already submitted a proposal to the Centre for taking over the operations of DMS. Amul is keen on signing a long-term lease arrangement with DMS because it feels that buying assets worth hundreds of crores of rupees would not be viable even the issues related to employees need to be addressed. The DMS has milk production and packaging capacity of 5 lakh litres per day, besides a network of 1298 outlets in the NCR. The government-owned dairy unit has 800 employees, but the milk production is only about 2.5 lakh litres per day.

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November 2012


News

Mother Dairy launches ‘Maa Jaisa Koi Nahi’ campaign

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airy products brand Mother Dairy has launched a new campaign titled ‘Maa Jaisa Koi Nahi’ which highlights the pivotal role of mothers in a child’s life. Created by Ogilvy & Mather, the TVC portrays love and care that a mother has towards her child and urges everyone to

drink a glass of milk every day to remain healthy. The communication revolves around ‘slice-of-life’ situations depicting how children take their mother’s love for granted, irrespective of what age they are in. The objective is to gently remind the kids of what all their mothers go through just to keep them happy without ever expecting anything in return. The least they can do in return is to drink a glass of milk today so that tomorrow they can take care of their mothers. The TVC has been launched on a panIndia with Hindi, Marathi, Telugu and Tamil edits. The print and social media too are being tapped in different cities across India. Mother Dairy had a month back also changed the packaging of its milk packets. The new look of village graphics

highlights how milk from the farm reaches the consumers home. Now with this new TVC coming on air, the brand aims to trigger the hearts of consumers and go closer to them by making consumption of milk a ritual of every morning. Company spokesperson from Mother Dairy Fruit & Vegetable said, “Since the time a child is born, mothers play a pivotal role in developing this good habit of drinking milk, thus ensuring good health of her family. “It was time to pay a befitting tribute to the millions of mothers of this country who have silently been the pillar of strength and support for their children. Therein was born our communication idea, out of a simple, an age old truth that we all know of, but somehow fail to acknowledge-Maa Jaisa Koi Nahi.”

Amul Dairy’s Mumbai plant to go on stream soon

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fter commissioning three million litres per day (LPD) milk plant by Dudhsagar Dairy at Gurgaon in Haryana, another member of Gujarat Co-operative Milk Marketing Federation (GCMMF) is all set to start its plant in Mumbai. Kaira District Co-operative Milk Producers’ Union, popularly known as Amul Dairy, is gearing up to commission its one million LPD milk plant in Mumbai by December end. “The construction of the plant started a year back and the plant is ready for commissioning. Amul Dairy will start the operations by the end of December,”

said sources in Kaira District Co-operative Milk Producers’ Union. The investment for the new plant is around Rs 150 crore. The Mumbai plant will manufacture milk and other milk products such as dahi, ice-cream and butter milk. Amul Dairy already operates plants at Anand and Pune. Apart from this, it is also building one more plant at Kolkata. “The dairy business in India is growing and milk procurement is also increasing. This year we expect milk procurement to be higher by 20%. As a result, the member dairies of Gujarat Co-operative Milk Marketing Federation (GCMMF)

are expanding their milk processing capacities,” said a senior official of GCMMF, which owns and markets Amul brand of milk and milk products in India. In addition to this, Sabarkantha District Co-operative Milk Producers’ Union Limited, also known as Sabar Dairy, is setting up new plant in Rohtak, Haryana. Just a week ago, Mehsana District Co-operative Milk Producers’ Union or Dudhsagar Dairy set up a new dairy at Gurgaon in Haryana with three million liters per day capacity and an investment of Rs 350 crore.

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News

AP to set up livestock heritage farm

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ndhra Pradesh Chief Minister N. Kiran Kumar Reddy said that the State plans to set up a livestock heritage farm and develop Araku Valley near Visakhapatnam as a global agriculture heritage site. Addressing the high-level Segment of Conference of Parties (COP) 11 at the

Convention on Biological Diversity, the Chief Minister said that livestock heritage farm is aimed at preserving the unique cattle breeds of Ongole and Punganur, sheep breed of Deccani fame and poultry breed of Aseel. The Araku Valley will be developed as an agricultural heritage site recognising the contributions made by tribal families to the development of climate-smart agriculture. He said that necessary documentation was prepared for submission to the Food and Agriculture Organisation. He said that sustainable use of biodiversity and its resources would pave way for economic development and more so help poorer sections of society. To mark the historical convention

here, the State is creating a biodiversity complex in Hyderabad. It would host a biodiversity museum with the support of the National Government. Thanking the Prime Minister, Manmohan Singh, for supporting the initiative, he said that the commemorative pylon has been developed to acknowledge the participation of delegates from all over the world. The monument captures organic evolution of life over millions of years. The Biodiversity Park is expected to connect with various countries that participated in the event. Members would plant a sapling there. As the sapling grows each year, it should signify the growing efforts of mankind to conserve and preserve biodiversity, he said.

68% milk in country fail to meet FSSAI standard: Government

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ver 68 per cent of milk in the country does not conform to the standards set by the Food Safety and Standards Authority of India (FSSAI), the Centre has told the Supreme Court on a plea for checking sale of synthetic and adulterated milk and various dairy products. The submission has been made by the Centre in its affidavit which referred to a survey conducted by the FSSAI, which had found that over 68 per cent of the “non-conforming” milk was found in urban areas, 66 per cent of which was loose milk. According to the FSSAI’s 2011 survey, the most common adulterant was found to be the addition of water, and the main reason for deviation from the standards was addition of glucose and skimmed

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milk powder. It also found that in some samples, detergent was mixed. The affidavit was filed in response to the notice issued on a PIL by a group of citizens, led by Swami Achyutanand Tirth of Uttarakhand, seeking a check on sale of synthetic and adulterated milk and various dairy products. Notices had also been issued to Haryana, Rajasthan, Uttar Pradesh, Uttarakhand and Delhi governments on a PIL alleging that synthetic and adulterated milk and milk products are prepared using urea, detergent, refined oil, caustic soda and white paint which, according to studies, are “very hazardous” to human life and can cause serious diseases like cancer. The petitioners’ advocate Anurag Tomar said that the affidavit is silent on

November 2012

many aspects which allegedly refer to adulteration of milk and its products. The affidavit said that over 83 per cent of the non-conforming milk in rural areas was found to be loose milk.


News

IBM to offer cloud service to Kwality Dairy

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echnology giant IBM said it has bagged a contract for cloud services from Kwality Dairy India (KDI), a dairy and dairy products company in northern India. KDI has selected IBM cloud to improve the dairy’s operational efficiency and productivity in its bid to become a global milk and milk products company, IBM said in a statement. The contract value was however not disclosed. KDI was facing challenges in managing its cash operating cycle effectively and wanted to streamline business processes and improve efficiency across various operations to deliver superior quality products. It was previously using non-integrated solutions, which did not help address the business issues and further impacted operational efficiencies. “Currently, KDIL processes about 1.7 million litres of milk per day, making it one of the largest milk procurement

operations in Northern India. Our long term vision is to become a global milk and milk products company and to achieve this goal, we have to integrate our operations and improve business efficiency,” KDI CMD Sanjay Dhingra said. The IBM SmartCloud SAP Express Dairy Solution, in one of the first such deployments in the Indian dairy industry, will help KDIL build a more robust, integrated operations system and address challenges related to milk procurement and payment, production, and fat and SNF (solid not fat) accounting, among others processes. India is the largest milk producing country in the world, with an estimated annual milk production of over 120 million tonnes, which is expected to reach 190 million tonnes in 2015. However, the Indian diary industry is largely fragmented and presents unique challenges in terms of procurement as well as distribution. “IBM is committed to the success

of companies like KDI and is making significant investment to help these companies succeed. We view these companies as engines of global economic growth, innovation and industry transformation,” IBM Global Business Services (India/South Asia) Partner (CPG, Retail and Smarter Commerce Industry leader) Kamal Singhani said.

Govt lifts export ban on some milk products

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onsidering surplus availability of milk powder in the country, the government lifted the export ban on milk products, especially on whole milk powder and dairy whitener, for five months. “The Cabinet Committee on Economic Affairs (CCEA) approved lifting the ban on export of whole milk powder (WMP), dairy whitener, infant milk foods and other milk products till March 2013,” sources said. In February 2011, the government had imposed ban on export of all kinds of milk products — skimmed milk powder (SMP), whole milk powder (WMP), dairy whitener, infant milk foods, casein and casein products — to boost domestic

supply. The ban was, however, withdrawn only in the case of casein in April and SMP in June of this year. The export of these items would be reviewed after March 2013, they said. The CCEA decided to withdraw the export ban on some milk products in view of flush season for milk that started this month, improved supply of milk and milk powder in the country. The Committee was also convinced by the Agriculture Ministry’s view that there is scope for domestic dairy industry to export milk products without any incentives at this point of time because of better global prices.

For instance in Europe, WMP prices rose to USD 3,862 per tonne in September from USD 3,150 per tonne in the same period last year, the Ministry said. Also, the Ministry explained that the requirement of WMP is not significant in the country as fat content in it is prone to rancidity if stored in cool places, sources added. Currently, there is a stock of 1.12 lakh tonnes of milk powder in the country. As much as 300 lakh kilos of milk per day were procured in the country in September, while sales were to the tune of only 260 lakh kilos per day. Inflation in milk on the Consumer Price Indice (CPI) stood at 11.43 per cent last month.

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News

Palm oil to surge 21% as demands peak up

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alm, the world’s most-consumed cooking oil, is set to rally as much as 21 percent in the next eight months as a pickup in global demand and a decline in output reduce record stockpiles, according to Sime Darby Bhd. (SIME) Futures in Malaysia, the global benchmark, may range from 2,800 ringgit ($916) a metric ton to 3,100 ringgit in the first half of 2013, said Franki Anthony Dass, executive vice president at Sime Darby Plantations Sdn., a unit of the world’s biggest listed producer. The commodity may trade between 2,400 ringgit and 2,700 ringgit until the end of this year as demand recovers before the festival season in India, Dass said Oct. 19. Palm oil, used in foods and biofuels, fell to a three-year low this month as economic slowdowns in China and the European Union curbed demand, pushing reserves in Malaysia to the highest ever. The biggest producer after Indonesia announced on Oct. 12 a plan to cut the tax on crude exports and abolish a dutyfree shipment quota from Jan. 1 to help liquidate the inventories. The tax cut will “give companies the opportunity to move the surplus stock out of the country,” Dass said in an interview at his office in Subang Jaya, outside Kuala Lumpur. “That should reduce the stock and help the price move up.” Reserves of crude palm oil gained to 2.48 million tons last month, according to Malaysian Palm Oil Board data. That was the third monthly climb, and 46 percent above the level in June. Stockpiles may reach or exceed 3 million tons on Jan. 1, Dorab Mistry, director at Godrej International Ltd., said on Oct. 16. Price Drops Futures plunged to 2,230 ringgit on

the Malaysia Derivatives Exchange in Kuala Lumpur on Oct. 3, the lowest level since November 2009, and are set for a second annual drop. The January-delivery contract climbed 2.5 percent to 2,564 ringgit at 5:16 p.m. in Kuala Lumpur, showing a loss of 11 percent for the most active contract in the past year. Some of the inventories may be depleted when India restocks before the Diwali festival on Nov. 13, and as biodiesel demand rises in Europe as the winter months approach, said Dass, who’s been in the industry for 30 years. Less production expected in the first quarter would also boost prices, he said. Output is typically at the lowest level in January and February. The slowdowns in Europe and China, the biggest cooking-oil consumer, have failed to cut demand for food, including palm oil-based products and prices will lure buyers, he said. ‘Don’t Stop Eating’ “In China, the economy can slow down, but the Chinese don’t stop eating,” Dass said. “The demand for food will always be there and China will pick up again. The economic slowdown for China is only disrupting the pricing.” Malaysia’s move to cut export taxes will benefit producers with refineries and help them compete with supplies from Indonesia, Dass said. “The move by the government is positive to reduce the stocks, and makes the feedstock price competitive and improves our refinery margins,” he said. The new rates will range from 4.5 percent to 8.5 percent, rising as prices climb from 2,250 ringgit to 3,600 ringgit, Plantation Industries and Commodities Minister Bernard Dompok said on Oct. 12. The existing levy is 23 percent. Indonesia

last year cut export taxes to make local crude palm oil, or CPO, cheaper than in Malaysia, cutting costs for refiners. Sime Darby, which produces about 2 million tons of sustainable and traceable palm oil, plans to raise crude output about 10 percent in the year to June 30, said Dass. Production may gain to 2.72 million tons from last year’s 2.45 million tons, with most of the growth in Indonesia, he said. Better Fertilizers The diversified group, which also builds townships and houses, operates power plants and retails cars, is using better fertilizers and mechanizing farming to boost yields, said Dass. “Sime Darby’s long-term growth is still intact but because of the lower CPO price year-on-year and also slower demand in the industrial division, we’re going to see flattish earnings for” fiscal 2012-2013, Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd., said from Kuala Lumpur today. Demand would ease due to the slowing global economy, Lim said. Sime Darby owns a total of 878,797 hectares (2.17 million acres) of land in Malaysia, Indonesia and Liberia and about 60 percent of the area is planted with oil palms, according to the company. The land includes 220,000 hectares in the African country as part of a concession to plant oil palm and rubber. “We’ll continue to look at opportunities to expand both in Indonesia and Africa and these will definitely be our main target areas for oil palm,” said Dass. Sime Darby was little changed at 9.80 ringgit. The stock has advanced 6.5 percent this year as the benchmark FTSE Bursa Malaysia KLCI Index (FBMKLCI) rose 8.6 percent.

Poor monsoon downs groundnut production in Gujarat The delayed and deficient monsoon rains in Gujarat has hit its groundnut production, which is expected to decline by 61 per cent to 6.95 lakh tonnes this year, a survey by industry body, SEA said. Gujarat, which is a major groundnut growing state of the country, had produced 17.75 lakh tonnes of the important cash crop in 2011, the Solvent Extractors Association of India (SEA) 40

SAARC OILS & FATS Today

said in a statement. “The overall crop is reduced to nearly one-third at 6.95 lakh tonnes compared to 17.75 lakh tonnes in 2011-12,” the SEA said. The Gujarat government has reported that 12.24 lakh hectares is under groundnut crop sown during kharif season. However, the harvested area was down by nearly 25 per cent at 9.16 lakh hectares, due to

November 2012

rain deficit, wrong reporting and also uprooting area after sowing, it added. “Due to failure of monsoon and most of the districts received very less rain, the crop as well as the quality is seriously affected,” the SEA said. The average yield per hectare has reduced to 760 kg per hectare in 2012 against 1,238 kg per hectare last year, it added.


News

Ruchi Soya registers 17-fold jump in its profit

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dible oil producer Ruchi Soya today reported about 17-fold jump in its standalone net profit to Rs 65.66 crore for

the quarter ended September 30, 2012 on better realisation from exports. The Mumbai-based company had posted a net profit of Rs 3.78 crore in the year-ago period, it The standalone net sales of the soyabean products exporter, however, declined by about 12 per cent to Rs 5,391.33 crore in the second quarter of the current fiscal against Rs 6,093.13 crore in the same quarter period of 201112 fiscal. “Better sales realisation of Soya extraction and exports and favourable business sentiments towards the end of the quarter helped us to get profit on the track,” Ruchi Soya Managing Director Dinesh Shahra said. Price parity was restored in the import of crude oil and refining business as the government of India has eliminated

taxation anomalies since August 2012, he added. Shahra said the future outlook is bright following record sowing of soyabean crop in the country. “With the highest ever Soya crop in the current season in India, we are expecting better utilisation of our crushing capacities. Also the business sentiments improving, we are hopeful about achieving better utilisation of our refining facilities at port based locations,” he said. Ruchi Soya is thus hoping that its financial performance will be far better during the current fiscal, Shahra added. A leading producer of edible oils, soya foods, vanaspati and bakery fats, Ruchi Soya is also a major exporter of soya meal, lecithin and other food ingredients from India.

Malaysia & France to set up group to look at issues

Bernard Dompok

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alaysia will not, for now, take the issue of negative labelling of palm oil products by France to the World Trade Organisation. The Malaysian Minister for Plantation and Commodities Bernard Dompok said that the two countries had decided to set up a joint working group to look at the issues involved in France labelling its food products as palm oilfree. He was speaking after the inauguration of the Palm Oil Trade Fair and Seminar 2012 here, organized by the Malaysian Palm Oil Council.

“We are alarmed” about the things that were being done, said the minister about France’s move, triggered by allegations of destruction of rain forests for palm oil cultivation in the country. This was unfair to the oil palm industry and a non-tariff barrier, the minister added. Chairman of the Palm Oil Council Dato’ Lee Yeow Chor said that a joint working group had already been set up and that the representatives of the two countries were set to meet shortly. REFINERS The minister said that Malaysian palm oil refiners, who were handicapped by the relatively high price of crude palm oil vis-à-vis the commodity from Indonesia, now stood to gain from a decision by his ministry to lower export duty on crude palm oil. He said that palm oil refineries in Malaysia had to do some catching up now as he referred the decision last week to lower duty on export of crude palm oil. He said that the Malaysian palm oil industry

was resilient, and would overcome the challenges. DUTY STRUCTURE Malaysia, last week, decided to cut duty on export of crude palm oil which will make Malaysian supplies cheaper for Indian importers provided Indonesia does not change its strategies, according to the Executive Director of The Solvent Extractors’ Association of India, B. V. Mehta. He was speaking to journalists on the sidelines of a two-day Palm Oil Trade Fair and Seminar 2012. IMPORTS Under the new regime, effective January next year, the duty will range between 8.5 per cent and 5 per cent depending on the price range per tonne. He said import of vegetable oils stood at 9.5 million tonnes between November and September this year. During NovemberSeptember last year, India imported 7.77 million tonnes of vegetable oils.

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News

SEA wants import duty on crude palm oil

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espite India’s edible oil imports rising, Solvent Extractors has urged the Government to impose Customs duty on crude palm oil and refined oil imports. Such a move would help encourage farmers to plant more acreage under rabi oilseeds such as rapeseed/mustard, said B.V. Mehta, Executive Director, Solvent Extractors Association of India (SEAI). In a recent memorandum, SEAI has urged the Government to levy an import duty of 10 per cent on crude palm oil (CPO) and increase the duty on refined palm oils to 20 per cent. Currently, there is no duty on CPO imports, while the refined, bleached and

de-odourised (RBD) palm oil attracts a duty of 7.5 per cent, Mehta told reporters on the sidelines of Malaysian Palm Oil industry conference on Monday. “Prices of soyabean have crashed by about 30-35 per cent in the past few months as harvesting has commenced. Such a decline in commodity prices during harvest will discourage farmers to go in for expanding the rabi acreage. So this is the right time for the Government to intervene. The Government should not hesitate to protect the farmers’ interests,” Mehta said. Such a move would not have any impact on consumers as even the edible oil prices have crashed by about 30 per cent in recent months, Mehta said. Besides, the strengthening of rupee in recent weeks is aiding importers. The country’s edible oil import is poised to touch a record high of 10 million tonnes for the year-ending October 2012. For the November 2011-September 2012 period,

imports have already crossed 9.15 million tonnes, a growth of 18 per cent over previous year. Edible oil imports bill is estimated at Rs 55,000 crore, he said. For the current year, domestic edible oil requirement is pegged at 16.7 million tonnes and is expected to grow by five per cent to 17.4 mt next year, Mehta said. The annual growth in India’s edible oil requirement is around eight lakh tonnes. Of the projected imports of 10 million tonnes for the current year, palm oil accounted for three-fourth of imports at 7.5 millon tonnes, while the rest is sunflower and soyabean. The prospects for rabi oilseed cultivation have improved due to late rains in August and September. “The rabi sowing is starting soon. If farmers get good price, then acreage will expand in North India,” Mehta said stressing on the need to increase domestic production to curb imports.

Rabi oilseed planting begins on sluggish note

P

lanting of oilseeds for the rabi season has started on a sluggish note on delayed kharif harvest. Early data from the Agriculture Ministry suggests that sowing of key rabi oilseeds such as rapeseed, mustard and safflower are yet to gain momentum. As of October 25, the acreage under rabi oilseeds stood at 8.37 lakh hectares, down by more than half of last year’s 20.15 lakh ha in the corresponding period. Rapeseed mustard has, so far, been planted in about 6.71 lakh ha against 18.55 lakh ha in the corresponding period last year. “Farmers are waiting for the temperatures to come down,” said B.V. Mehta, Executive Director of Solvent Extractors Association of India, expressing optimism that “sowing will pick up over the next two to three weeks”. Further, the delay in harvesting of kharif crops such as rice and other cereals may push back the rabi planting by a 42

SAARC OILS & FATS Today

couple of weeks. The delayed arrival of the South-West monsoon this year had hurt the kharif crops. Besides, the farmers are also waiting for the minimum support price (MSP) announcement from the Government to decide on their plantings. “Farmers will look at prices of competitive crops before deciding on plantings,” Mehta said.

November 2012

The Government is expected to announce minimum support prices for rabi crops over the next couple of weeks. The Commission for Agricultural Costs and Prices (CACP) has recommended a Rs 500 increase in MSP of rapeseed mustard at Rs 3,000 a quintal for the 201213 season. For safflower, the MSP hike has been suggested at Rs 200 to Rs 2,800 a quintal. The oilseed extraction industry is expecting a 20 per cent rise in rabi output this year. Rapeseed mustard output is pegged at 6.5 million tonnes against last year’s 5.5 million tonnes, as late revival in monsoon has created a conducive atmosphere for rabi plantings. The kharif oilseed had taken a hit on account of delayed and erratic monsoons and the total output is pegged lower at 18.78 million tonnes against last year’s 20.78 million tonnes.


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