Participating in GLOBOIL Mumbai, APK-Inform representatives took an interview with the Head Soft Commodities Procurement (ITC Ltd, INDIA), Ali Muhammad Lakdawala.
— In Your opinion, how trade war between the USA and China does affect the global market of oilseeds and oil? Does India feel this impact?
Globally ripple effect has been felt on account of trade war between the US & China. Edible oil & oilseeds market are not immune from such change, considering the US is the world largest producer & China is world largest consumer. As for the tariffs & counter tariffs between the US & China, we have seen other countries will benefit, especially LatAm countries Brazil & Argentina for soybean demand.
Considering India is net importer of edible oils (almost 70% of its edible oil demand is imported) in that case price change in LatAm market will have significant impact.
— Talking about India, tell us more about new government policy to support farmers. How does it influence crushers and importers of veg oils?
The current government polices are very farmer centric in India. It comes in the form of the minimum support price (MSP) for oilseeds, wherein the Government fixes minimum price for oilseeds so that farmers are not impacted during domestic harvest period or good oilseeds crop globally. Also, the Government supports farmers by implementing trade barriers in the form of import duty hikes, so that other edible oilseeds & oil producing nations do not dump their crop in India. Last but not the least, the Government also provides export incentives for the exports of oilseed meals considering it is GM-free and caters to niche segment.
The Government policies does influence planting intention in India also with eveloved commodity markets in India in that case farmers are able to make better selling decision and get remunerative price for their crop.
— Does consumption of vegoils still growth in rapid pace? How will be demand for vegoils in India in future?
Consumption of edible oil has been growing in India at rapid pace considering good disposable income in the hands of Indian middle class.
Also India will remain largest consumer of edible oil considering its domestic production has been stagnant since long time and it has to import its edible oil requirement. However, India is very price sensitive market for that reason people switch between palm & soft oils rapidly.
— India is the main importer of sunflower oil. What is the reason of such success of sunoil in India?
One of the reason for good sunoil demand in India is its stagnant oilseeds production. Also, sunoil competes with other soft oils — soyoil & rapeseed oil accordingly, if competitive pricing of sunoil vis-a-vis other soft oils is also the major reason for good sunoil demand.
Also, I would like to share that had presented my prognosis to the Russian edible oil market in July, wherein sunoil demand in India is expected to continue its growth trajectory especially in South India, which is the largest importing center of sunoil in India.
— How do You estimate future development of sunflower oil demand in India in 2018-19 MY?
India is the price sensitive market. If sunoil prices are competitive, it will capture the Indian edible oil market. Considering good sun seed crop and with better prices, we could possibly see India importing nearly 2.5-3 mln tonnes of sunoil.
— What about new oilseeds crop in India this and next year? Will there be any surprises from weather and/or the government?
India oilseeds production is stagnant and we do not expect any changing numbers in India. However, on the weather front monsoon has been very erratic and possibly have little impact on Indian soybeans, cotton & groundnut crop.
Only surprise from the Government side could be in the form of further export incentive for oil meals & possible import duty hike. Since we heading for election year in 2019.
— How economic situation in India does influence traders of vegoils?
It does impact heavily considering all imports are priced in dollar. For that reason, if Indian economy detoriates, in that case Indian Rupee depreciates against dollar, in turn inflates the price of imported edible oil.
— Can You give any advices for sunoil exporters from the Black Sea region, who want to enter the Indian market?
India will continue to be largest edible oil importer in global market as its consumers edible oil appetite continues to increase. Hence, consistency of quality, price & deliverable on time will be something one needs to be watchful for Black Sea importers.