February 17, 2012

 

India may replace China as top global soyoil buyer

 

 

India is anticipated to overtake China as the biggest soyoil importer worldwide, the USDA said and forecast India can become the third largest rice exporter by 2012.

 

"India is projected to replace China as the world's largest soyoil importer. In the projections, India's soyoil imports climb 28% to 1.2 million tonnes," it said.

 

Factors that contribute to the continued growth of India's soyoil imports include burgeoning demand for vegetable oils and a limited capacity to expand domestic oilseed production.

 

Low yields, associated with excessive monsoon rainfall and low input use, also inhibit growth of oilseed production, the report said.

 

Noting that in 2008, in response to high world prices, India cut its edible oil import tariffs to zero, the USDA said it is assumed that during the next decade, India's soyoil tariff will gradually return to its previous rate of 45% and tariffs for the other major imported oils, palm and sunflower, will remain below their historical highs of 75 to 85%.

 

The USDA said by 2021, India is expected to be the third largest rice exporter of the world.

 

"India's rice exports are projected to rise to about 4.8 million tonnes by 2021, making it the third-largest exporter," it said.

 

India's rice-export levels it said have been volatile, primarily due to fluctuating stock levels and Government policies.

 

"India's exports have been well below previous levels for the last several years as exports of non-basmati rice have largely been banned since the spike in world prices in early 2008. In September 2011, the Government eased this ban," the USDA report said.

 

On cotton, the report said its improved yields in India, largely due to the adoption of Bt cotton, have raised India's production and exports in recent years.

 

Yield growth is projected to continue as the area planted to Bt cotton expands and cultivation practices improve. The increase in cotton output is expected to enable India to increase textile production and generally maintain cotton exports.

 

The USDA said beef exports from Asia, mostly from India, increased sharply after 2009.

 

"Developing countries' demand for India's lower priced beef is projected to continue rising rapidly. India's rising exports account for 40% of the increase in world beef trade," the report said.

 

Exports of lower priced beef from India and Brazil to a number of low- and middle-income countries account for much of the projected increase in world beef trade, it said.

 

USDA said India's soymeal exports decline as domestic use strengthens and export competition from South America intensifies.

 

"Exports fall from more than four million tonnes in most recent years, to 1.5 million by 2021, as rapidly increasing poultry, egg, and milk production absorbs more of India's domestic soymeal production," it said.

 

China and India are the countries that currently import the most soyoil.

 

Growth in world soyoil trade will be constrained by competition with palm oil, which is the leading vegetable oil traded internationally, it said.