Diligence & Excellence

MAJOR RESEARCH PROJECT

ON

IMPORT OF SOYABEAN OIL

MASTER OF BUSINESS ADMINISTRATION (I.B.) (2007-2008)

FACULTY GUIDE: SUBMITTED BY: PROF. K. K. KINARIWALA RAHUL BAJPAI

CERTIFICATE

M.

This is to certify that Rahul Bajpai of MBA(IB) IV Semester has undertaken a project on Import of Soyabean Oil in lieu of part fulfillment of Master of Business Administration (International Business) of Devi Ahilya Vishwavidyalaya, Indore and has submitted this project work.

The work has been carried out to my satisfaction and he has given exhaustive information regarding the topic. The work has been carried out under my supervision and guidance. I wish success and good luck in all his endeavors.

____________________
(PROF. K. K. KINARIWALA) Faculty Guide, Pioneer Institute of Professional Studies, Indore

ACKNOWLEDGEMENT

Exchange of ideas generates energy and will to work in a better way whenever is helped and co-operated by others his heart is bound to pay his gratitude and obligations to them. Acknowledgement is not a mere formality but an expression of deep gratitude and communicates applications. I take this opportunity to express my gratitude and thanks to all those who helped me in various ways in the successful completion of this project report. I am thankful to Mr. P. K. Jain (Director PIPS, Indore) to provide me an opportunity to do this project report. I am thankful to my guide Prof. K. K. Kinariwala for his invaluable guidance. I am thankful to all the faculty members for their guidance.

RAHUL BAJPAI MBA(IB) IV Sem.

CONTENTS
Executive Summary Introduction o Structure of Soya Industry o Soyabean Oil o Problems of Indian Soya Industry o Import of Soyabean Oil Review of Literature Research Methodology o The Study o The Design o The Sample o Data Analysis Analysis of Trend Results Suggestions Conclusion Implications of the Study Bibliography

EXECUTIVE SUMMARY
This project report aims at identifying and developing the import potential of soyabean oil. The major focus is on which market Indian edible oil can serve well and penetrates in that particular market. Today, edible oil industry produces an array of a number of items, some of which have received acceptance in the international market. The government of India through its various schemes is providing number of benefits for the development of this industry, both in terms of production and marketing. Though, this industry have achieved considerable strikes in export, it is basically a domestic market oriented industry. Soya oil industry is having a very good area in the international trade and is growing day-by-day as international trade is increasing. So details study is very essential to draw out the potentialities inherent in it. The past statistical data and current information about the industry provides the platform for the soya oil industry to envisage the future trend of the industry.

Chapter 1 INTRODUCTION

STRUCTURE OF SOYA INDUTRY

In India around 52 lacs tons of Soya bean is raised every year, out of which 6 lacs tons go for seed purpose. The balance of 46 lacs tons are crushed to produce 37 lacs tons of Soya extractions and 9 lacs tons of Soya oil. Out of 37 lacs tons of Soya extraction, demand from bakeries and human grade Soya flour is in the region of 50,000 tons go for shrimp feeds. Cattle feed consumed around 4 lacs tons and poultry feed takes 20 lacs tons. The balance of 12 lacs tons are exportable surplus, which are exported to the neighboring countries.

Soyabean in India early attempts :

The origin of soyabeans introduction into India is not known, but it probably came from China through the Himalayan Mountains centuries ago. Some believe that it was also brought in via Burnaby traders from Indonesia. As a result, soyabean has been traditionally grown on a small-scale in Himachal Pradesh, the Kumaon Hills of Uttar Pradesh (now Uttaranchal), eastern Bengal, the Khasi Hills, Manipur, the Naga Hills, and parts of central India covering Madhya Pradesh. The bean is referred to locally as bhat, bhatman, bhatmas, ramkulthi, garakalay, and kalitur. Because of its high protein and oil content, and other attributes such as its beneficial effects on soil fertility, several attempts were made in the past to popularize soybean. Cultivation in India, including the initiative taken by Mahatma Gandhi himself in 1935. The first systematic attempts to develop improved varieties of soybean suitable for Indian environments were made in the early 1900s at the Pusa Agricultural Research Farm in Bihar State, and the work was eventually extended to West Bengal, Orissa, Uttar Pradesh, Delhi, Punjab, MadhyaPradesh, Maharashtra, Tamil Nadu, and Rajasthan (Woodhouse and Taylor, 1913; 1914; Lal, 1968).

Several varieties were evaluated at Pusa Farm between 1917 and 1924; single plants selected and found promising included No. 1 (yellow), No. 2 (chocolate), and No. 3 (black). These were found superior to cowpea (Vigna unguiculata), guar (Cyamopsis tetragonoloba), and moth bean (Phaseolusaconitifolia) with respect to grain as well as fodder yields. Research in Uttar Pradesh was initiated in 1943 at Kanpur with 100 lines from USA and 139 lines from other sources. A number of selections were made. T-1 and T-33 (both black), T-49 (yellow), and T-2 (brown) were the most promising; T-1and T-49 were recommended for cultivation on the plains; T-33 was recommended for the hills; andT-2 was recommended for fodder. T-1 and T-49 are still grown in a few pockets in Uttar Pradesh. Work on soybean improvement in Punjab began in 1947 and about 90 varieties were evaluated. Punjab Soy No. 1 was developed and recommended for cultivation in the Kangra valley. The Indian Agricultural Research Institute (IARI) also initiated work on soybean at Delhi in 1947, and number of varieties from USA was evaluated. Monnetta was found to yield well for both grain and fodder. Considerable work was also done on soybean improvement in West Bengal at Kalimpong and Berhampore, resulting in three improved varieties: Soyamax, K30, and Barameli. Soyamax is still cultivated in the Kalimpong area. Soybean improvement in the central and southern parts of India began in the early 1900s almost at the same time as at Pusa Farm and continued until the late1950s. A number of lines were evaluated at Jabalpur, Seoni, Indore, and Powerkheda (MadhyaPradesh), Nagpur and Yavatmal (Maharashtra), and Chennai (Tamil Nadu), and several selections were made. Some of these were recommended for general cultivation. A variety called Kalitur is still being grown in Madhya Pradesh.

Soyabean in India New attempts and challenges:

To deal with the countrys perennial food shortages, a total of 23 agricultural universities were established in India during 196063 (on the land-grant pattern), supported by the Government of India and the United States Agency for International Development (USAID), and selected universities from USA. Also, several projects to boost food production in the mid-1960s received synergistic support from agriculture-related industries and the Government, which not only ensured seed production, farm credit, irrigation water, fertilizers, and pesticides, but also provided food storage and processing capacity to create a market for the produce. The countrys agriculture was about to take off, with improvements already under way for dwarf wheat (Triticum aestivum) and rice (Oryza sativa) varieties. At the same time, the growing protein shortage in the country due to the stagnant pulse production also became apparent, and efforts were initiated to take a fresh look at soybean cultivation in India. The pioneering work on testing new soybean varieties in India was initiated by GBPUAT, Pantnagar, and the Jawaharlal Nehru Krishi Vishwa Vidyalaya, Jabalpur, in collaboration with the University of Illinois, USA. The preliminary trials conducted at Pantnagar and Jabalpur in 196566 using soybean varieties from southern USA was very encouraging. Some of the varieties, such as Bragg and Hardee, for example, yielded 3 to 4 t ha-1 within 110130 days. These yields were 200% to 300% higher compared with the average yields of 11.5 t ha-1 from other pulses such as Mung bean (Vignaradiata), black gram (Vigna mungo), and Pigeonpea (Cajanus cajan). This was very encouraging, because the annual production of pulses and oilseed crops in India had plateau at 1112 million tons, and the rapid increase in population was reducing the per-person availability of protein and oil, resulting in serious malnutrition.

These results prompted the Indian Council of Agricultural Research (ICAR) to initiate, on 1 April 1967, an all-India project for coordinated research on soybeans, with the main centers located at Pantnagar, Jabalpur, and Delhi, and several sub-centers across the country. Substantial funds were committed to the project by ICAR as well as USAID, which was providing technical assistance to anumber of agricultural universities in India at that time. Each main center had at least one breeder, one agronomist, one plant pathologist, one entomologist, one microbiologist, one food scientist, and one economist. Varietal trials were conducted at several locations in 1967 and 1968, and based on outstanding performance; Bragg (a soybean variety from Mississippi, USA) was released in 1968 for general cultivation. Sizable quantities of seed were imported and multiplied on the farm at Pantnagar University and on large farmers fields around Pantnagar in 1969. The first commercial crop was grown by farmers in 1970 and, with this, came numerous problems, questions, and challenges.

SOYABEAN OIL
Soyabean Oil is the leading vegetable oil traded in the international markets, next only to palm. Palm and Soyabean oils together constitute around 68% global edible oil trade volume, with soyabean oil constituting 22.85%. During the last decade, volume of soyabean oil exported has grown at the rate of 4.05%. It accounts for nearly 25% of the World's total oils and fats production. Globally, production of soyabean oil has grown at the rate of 5.8% during the last decade. Increasing price competitiveness, and aggressive cultivation and promotion from the major producing nations have given way to widespread soy oil growth- both in terms of production as well as consumption. Argentina, Brazil, China and India along with US are the major contributors for the growth. While US has a strong domestic consumption base and mostly exports soyabean in addition to oil, Argentina and Brazil exports much of their production, mostly in the form of crude oil. China and India, though being producers themselves, import soyabean/its derivatives to cater to their expanding consumer base. While China imports both bean and oil, India allows only imports of oil. Global consumption shot up to 29.38 million tons in 2001-02, growing at the rate of 5.76% during the past decade. Notable upward movement in consumption in soyaoil is being seen in EU, Central Europe, Russia, Egypt, Morocco, US, Mexico, Brazil, China and India. Soyabeanoil is the derivative of soyabean. On crushing mature beans, 18% oil and 78-80% meal is obtained. While the oil is mainly used for human consumption, meal serves as the main source of protein in animal feeds.

India is the World's largest importer of edible oils in the World. Of the total 5.0-5.5 million tons of vegetable oils imported, 1.3-1.5 million tons is soyabean oil, imported mostly form Argentina, and followed by Brazil and US. In addition to imports, domestic production of around 0.7-0.8 million tons takes the annual soyabean oil consumption of the country to 2.0-2.2 million tons, with a market value of Rs 8000 crore. Crude and Refined soyabean oils are permitted to be imported into India at an import duty of 45% and 50.4% respectively. Imports of soyabean oil into India have been on a continuous rise since the past 6-7 years. It has witnessed a sharp rise from a mere 84,000 tons during 1996-97 to 1.54 million tons during 2001-02. Indian edible oil market is highly price sensitive in nature. Hence, the quantity of soyabean oil imports mainly depends on the price competitiveness of soyabean oil vis--vis its sole competitor, palm oil. This also implies that soyabean oil prices are highly influenced by palm oil prices in Malaysia, the market leader in palm oil production and exports. In India, ready (spot) markets of Indore and Mumbai serve as the 'reference' market for soyabean oil prices. While the Indore price reflects the domestically crushed soybean oil (refined and solvent extracted), Mumbai price indicates the imported soy oil price. Futures trading in soyabean oil is also prevalent in many futures exchanges in the country, the prices of which are largely influenced by the international edible price movements (especially Malaysian palm oil and soyabean oil at CBOT), soyabean availability in domestic markets, demand for meal and other associated supply-demand factors of soyabean and its derivatives.

Soyabean oil is among the most vibrant commodities in terms of 'price volatility'. Its prominence in the international edible trade scene (9-10 million tons), concentration of production base in limited countries as against its widespread consumption base, its close link with several of its substitutes and its base raw material (soyabean) in addition to its co-derivative (soya meal), the nature of the existing supply and value chain, etc throw tremendous opportunity for 'trade' in this commodity. The opportunity is further enhanced by the expected rise in consumption base and the consequent increase in imports of vegetable oils in the years to come. Futures trading in soyabean oil would essentially serve as the right tool for hedging market-linked risk by all those in the value chain of the commodity- the soyabean producing farmers, processors, brokers, speculators, soyabean and meal traders, traders of other oilseeds and oils, etc. Soybean oil is a very healthy food ingredient despite the bad publicity regarding fats and oils in general. Soybean oil does not contain much saturated fat. Saturated fat causes heart diseases and is mainly found in products from animal origin. Soybean oil is also used by the food industry in a variety of food products including salad dressings, sandwich spreads, margarine, bread, mayonnaise, nondairy coffee creamers and and snack foods. Soybean oil contains natural antioxidants which remain in the oil even after extraction. These antioxidants help to prevent the oxidative rancidity.

About 97 percent of Soyabean oil is used in a wide range of products for human use, such as: 1. cooking oils 2. salad dressings 3. sandwich spreads 4. margarine 5. salad oils 6. coffee creamer 7. mayonnaise 8. shortenings 9. chocolate coatings 10.a flour ingredient medicines Soyabean oil also is used in such industrial products as: 1. printing inks 2. cosmetics 3. linoleum 4. vinyl plastics 5. paints 6. caulking 7. compounds 8. pesticides 9. epoxy 10.protective 11.yeast 12.soap 13.shampoos and detergents

14.rubber

SOYABEAN OIL INGREDIENTS

Soya oil has found a home in many commercial food products, from salad dressing to baked goods. While it beneficial in many ways, it should not be overconsumed because it still adds fat to your diet. As a plant food, soya is low in saturated fat (about 15 percent). Of the polyunsaturated fat in soya oil, about half is linoleic acid, a fatty acid we need in small but significant amounts. In addition, soya oil contains an important and beneficial fatty acid, linolenic acid, an omega-3 fatty acid found primarily in fish oils. Omega-3 fatty acids are believed to be helpful in preventing heart disease. Soya oil is about percent linolenic acid, making it an important source for vegetarians and others who do not consume fish. Soya oil is found in so many food products that it would be difficult to find many commercially prepared baked goods that do not contain at least some soya oil. Margarines and solid shortenings contain soya oil, as do many processed meat products. This does not mean that the products are any more healthful, however. When soya oil is used commercially it is usually partially hydrogenated, meaning that it is no longer polyunsaturated and the percentage of linolenic acid is reduced. In addition, hydrogenation produces a type of fatty acid that raises cholesterol levels. It is ironic that with all the health benefits that soyabeans offer, the typical U.S. diet features large amounts of soya oil, the least nutritionally important component of this special plant. Of course, this is explained by the fact that the U.S. is an important producer of soyabeans and soyabean oil is relatively inexpensive, not to mention versatile. On the positive side, Vitamin E supplements are also produced from soya oil. Lecithin is derived from soya oil and you might recognize it as an emulsifier in foods, that is, it is added to foods to keep them blended. Some people take granulated lecithin or lecithin capsules in an attempt to lower their cholesterol.

PROBLEMS OF INDIAN SOYA INDUSTRY

Poor capacity utilization around 31% to 35% much below break-even levels. Stagnant domestic demand- high cost of promotion and publicity. Unpredictable export market - lack of sustained and dependable demand. Lack of timely and adequate supply of soyabean of the requisite variety and quality and short season period of availability. Pest and quality problem in soyabean, apart from high prices problems in procuring the raw materials. Lack of technical guidance in regard to post harvest handling of soyabean and in minimizing spoilage and other losses. High prices of packaging material and high cost of other inputs like fuel, power, transport, etc Unduly high burden of taxation - sales tax, octroi, custom duty, etc. High cost of institutional and bank finance. Heavy undercutting and cutthroat competition of export markets. Lack of advertising and promotional measures so as to increase the sales.

IMPORT OF SOYABEAN OIL

In past four months, world prices of CSO (Crude Soya Oil) have risen by nearly 51% due to mismatch in global demand-supply. Crude soya oil shot up by 51% to trade around $1412 per tonne in February 2007. Globally, soyabean prices have zoomed to 34-year high and soyabean oil to 33-year high in March-April 08. Crude palm oil in Malaysia zoomed to $929 a tonne (Rs 36,600), while degummed soyabean oil was quoted at $1,229.50 a tonne in Europe (Rs 48,500). Domestic soyabean prices have increased to nearly Rs 20,000 and higher oil and meal prices are helping solvent units to a great extent. On the other hand, a record soyabean crop has also come to the countrys rescue. Production in 2008 is estimated at a record 94.6 lt against 79.6 lt last year. In fact, kharif oilseed production this year is projected at a 168.3 lt, up 34 lt over last kharif. However, rabi oilseed production could be lower than the normal 100105 lt due to fall in rapeseed/mustard area. Annually, over 10 lakh tonnes (lt) of degummed soyabean oil is imported with the shipments peaking during 2004-05 oil year (NovemberOctober) at 20 lt before declining to 17 lt in 2005-06 and 13 lt in 2006-07. Soyabean oil imports into the country have displayed a significant spurt this year with arrivals increasing by over 100 per cent from 2006-07.

Imports expanded to 18.2 lakh tonnes (lt) during the first 11 months of the year from November 2004 to September 2005 compared with 7.2 lt during same period last year. It is projected to touch a record 20 lt by October 2005, representing 40 per cent of the country's total imports for 2004-05, up from about 20 per cent, that is 9.0 lt out of total arrival of 44 lt in the previous year. This phenomenal increase is notwithstanding the fact that soyabean oil is expensive by as much as $100-120 a tonne than substitutes such as palm oil. Many believe imports have doubled merely because the rate of customs duty on soyabean oil is at a relatively low WTO-bound rate of 45 per cent while crude palm oil bears 80 per cent. In reality, imports have expanded because of the relatively high profitability of importing soyabean oil. Analysis of landed cost of soybean oil (including import related expenses and customs duty) and market price (ex-port) shows that import of this particular oil has been profitable vis--vis other oils in the last six months. Soya oil imports have brought in assured profit of anything between Rs 2,000 and Rs 3,000 a tonne for importers, quick calculations of costs and prices of last six months show. It is high profitability that has encouraged larger imports. In addition, huge refining capacities created in the country following tax breaks given by the Government are also forcing larger imports as refineries have to remain operational. One of the negative fallouts of large import of this oil has been the rampant adulteration of soya oil with sunflower oil, which is a premium product. Because of low import volumes, sunflower oil is about Rs 10,000 a tonne more expensive

than soyabean oil. This has provided facile opportunity for adulterators to blend soyaoil with sunoil, and palm off the mix as premium sunoil. Concerned over shrinking share of the Indian market, palm oil producers have been seeking a level playing field with soyabean oil in terms of the rate of customs duty. Given that palm oil is cheaper than soyabean oil by about $100 a tonne, either a lowering of customs duty on palm oil or a hike in duty on soyabean oil would provide solid support to palm oil in the Indian market. Demand for restricting soyabean oil import has already begun to do the rounds not only in industry circles, but also among government, primarily because unrestrained imports are seen hurting domestic soyabean and oil market. India is world's fifth largest producer of soyabean. Also, not only is the foreign exchange outgo higher on soyaoil import because of high price, but also revenue generation (customs duty) is lower because of lower rate of duty. The Government has not been able to successfully renegotiate a higher bound rate of customs duty for soyabean oil. Obviously, some non-tariff measure may be necessary to curtail its imports. Imposing restriction on soyabean oil produced out of genetically-modified (GM) soyabean could be one way to address the issue.

Import of Soya Oil during last five years:

Dated: 15/4/2008
Commodity: 15079010 SOYA BEAN OIL OF EDIBLE GRADE Country: U S A S.No. 1. 2. 3. 4. 5. 6. 7. 8. Values in US$ Million %Growth Total Import of commodity %Growth %Share of country (1 of 3) Total Import to country %Growth %Share of commodity (1 of 6) Exchange rate: (1US$ = Rs.) 48.3953 4,443.58 32.89 5,034.83 13.31 0.49 45.9516 74.66 Year 20022003 20032004 24.56 20042005 6.22 -74.66 46.76 -37.36 13.31 7,001.35 39.06 0.09 44.9315 20052006 8.72 40.06 11.79 -74.80 73.96 9,454.74 35.04 0.09 44.2735 2006-2007 5.22 -40.16 8.15 -30.85 64.00 11,726.96 24.03 0.04 45.2849

Department of Commerce
Export Import Data Bank Import :: Commodity x Country - wise
Dated: 15/4/2008
Commodity: 15079010 SOYA BEAN OIL OF EDIBLE GRADE Country: BRAZIL S.No. 1. 2. 3. 4. 5. 6. 7. 8. Values in US$ Million %Growth Total Import of commodity %Growth %Share of country (1 of 3) Total Import to country %Growth %Share of commodity (1 of 6) 316.79 13.92 313.52 -1.03 3.31 74.66 \Year 20022003 20032004 10.39 20042005 11.80 13.52 46.76 -37.36 25.23 792.40 152.74 1.49 20052006 1.17 -90.09 11.79 -74.80 9.92 893.06 12.70 0.13 990.91 10.96 -100.00 8.15 -30.85 2006-2007

Exchange rate: (1US$ = Rs.)

48.3953

45.9516

44.9315

44.2735

45.2849

Department of Commerce
Export Import Data Bank Import :: Commodity x Country - wise
Dated: 15/4/2008
Commodity: 15079010 SOYA BEAN OIL OF EDIBLE GRADE Country: ARGENTINA S.No. 1. 2. 3. 4. 5. 6. 7. 8. Values in US$ Million %Growth Total Import of commodity %Growth %Share of country (1 of 3) Total Import to country %Growth %Share of commodity (1 of 6) Exchange rate: (1US$ = Rs.) 48.3953 404.14 45.72 523.96 29.65 6.51 45.9516 74.66 \Year 20022003 20032004 34.13 20042005 27.23 -20.22 46.76 -37.36 58.24 539.59 2.98 5.05 44.9315 20052006 1.15 -95.79 11.79 -74.80 9.72 754.04 39.74 0.15 44.2735 45.2849 879.89 16.69 -100.00 8.15 -30.85 2006-2007

Department of Commerce
Export Import Data Bank Import :: Commodity x Country - wise
Dated: 15/4/2008
Commodity: 15079010 SOYA BEAN OIL OF EDIBLE GRADE Country: BANGLADESH PR S.No. 1. 2. 3. 4. 5. 6. 7. Values in US$ Million %Growth Total Import of commodity %Growth %Share of country (1 of 3) Total Import to country %Growth 62.05 0.05 77.63 25.10 74.66 \Year 20022003 20032004 0.04 20042005 0.09 120.20 46.76 -37.36 0.19 59.37 -23.52 20052006 0.75 743.96 11.79 -74.80 6.33 127.03 113.96 2006-2007 2.93 292.44 8.15 -30.85 35.93 228.31 79.73

8.

%Share of commodity (1 of 6) Exchange rate: (1US$ = Rs.) 48.3953

0.05 45.9516

0.15 44.9315

0.59 44.2735

1.28 45.2849

Department of Commerce
Export Import Data Bank Import :: Commodity-wise all countries
Dated: 15/4/2008
Commodity: 15079010 SOYA BEAN OIL OF EDIBLE GRADE Unit: KGS S.No. Country Values in Rs. Lacs 20072006-2007 2008(Apr- %Growth Jun) 1. 2. 3. BANGLADESH PR NEPAL USA Total 1,326.08 2.50 2,362.16 3,690.74 152.99 358.31 205.32 Quntity in thousands 20072006-2007 2008(AprJun) 4,408.13 7.79 4,752.83 333.73 758.00 %Growth

Source : www.commerce.nic.in

Chapter 2 REVIEW OF LITERATURE

REVIEW OF LITERATURE

Soya oil imports down to a trickle M.R. Subramani Chennai, Dec. 27 Import of soyabean oil (degummed) has declined to a trickle, thanks to disparity in its prices in comparison with crude palm oil and a record domestic soyabean crop. While not a single tonne of soyabean oil was imported in November, a negligible amount has landed this month. Soyabean oil could have been imported in one or two parcels this month. This is because its landed cost is $150 a tonne higher than that of crude palm oil, said Mr B.V. Mehta, Executive Director of the Solvent Extractors Association of India (SEA). According to SEA, the landed cost of degummed soyabean oil is $1,125 (Rs 44,300) a tonne, while that of crude palm oil is $965 (Rs 38,000). Edible oil imports jump 40% Dhimant Bhatt Posted online: Monday , March 17, 2008 at 2351 hrs IST Mumbai, Mar 17 Despite the sharp price rise in crude palm oil (CPO) and crude soya oil (CSO) globally in the past four months, flow of edible oils imports into the country has not been impacted during the current season 2007-08 thanks to demand-supply gap. Total imports of edible oils mainly crude palm oil, soya oil degummed, RBD palmolein and crude sunflower oil have registered a sharp increase of 40% and recorded at 15.12 lakh tonne over first four months of the current season 2007-08

(November/February) as against 10.83 lakh tonne in the same period last season, according to the Solvent Extractors' Association of India (SEA).

Chapter 3 RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
Research is common parlance refers to search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. Redman and Mary define research as a systemized effort to gain new knowledge. According to Clifford Woody research comprises defining and redefining problems for formulating hypothesis. Research is thus an original contribution to existing stock of knowledge for its advancement when we talk of research methodology we not only talk about research method but also consider the logic behind the research method we have used in the context of our research. Time series analysis is used to detect patterns of change in statistical information over regular intervals of time we project these patterns to arrive at an estimate for the future. Thus time series analysis helps us cope with uncertainties about the future. OBJECTIVE OF THE STUDY:

To study soya production in India. The study of current and future trends of import of soyabean oil. To identify the factors affecting the import of soya oil. To find out the countries who dominate the import of soya oil.

TOOLS FOR DATA COLLECTION: Data will be collected with the help of secondary sources. Such as national import-export reports available in the library, Journals, Magazines, Newspapers, and Internet.

STATISTICAL TOOLS FOR DATA ANALYSIS: The collected data will be analyzed with trend analysis. Trend analysis will be done in this equation like (co-relation) Y = a + bX Y = Trend value a = constant factor b = variable factor X = number of years

Chapter 4
DATA INTERPRETATION AND FINDINGS

TREND ANALYSIS

TOTAL IMPORT OF SOYA OIL TO INDIA

(US $ Million) Year 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Value 74.66 46.76 11.79 8.15 . . . . . Trend Value 70.51 47.06 23.61 0.16 -23.29 -46.74 -70.19 -93.64 -117.09

100

50

Value in US $ mn.

-50

-100

-150

Total Import Trend

03 20 4 -0 04 20 2 -1 11 20 1 -1 10 20 0 -1 09 20 9 -0 08 20 8 -0 07 20 7 -0 06 20 6 -0 05 20

-200

IMPORT OF SOYA OIL FROM USA TO INDIA

(US $ Million) Year 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Value 24.56 6.22 8.72 5.22 . . . . . Trend Value 19.51 13.96 8.40 2.85 -2.70 -8.25 -13.80 -19.36 -24.91

5 -0

year

TREND
2 -1 11 20 1 -1 10 20 0 -1 09 20 9 -0 08 20 8 -0 07 20 7 -0 06 20 6 -0 05 20 5 -0 04 20 4 -0 03 20

USA

-10

-20

-30

30

20

10

Value in US $ mn.

year

IMPORT OF SOYA OIL FROM BRAZIL TO INDIA

(US $ Million) Year 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Value 10.39 11.80 1.17 0.00 . . . . . Trend Value 12.11 7.93 3.75 -.43 -4.61 -8.79 -12.97 -17.15 -21.33

20

10

Value in US $ mn.

-10

-20 Brazil -30

4 -0 03 20 5 -0 04 20 6 -0 05 20 7 -0 06 20 8 -0 07 20 9 -0 08 20 0 -1 09 20 1 -1 10 20

TREND
2 -1 11 20

year

IMPORT OF SOYA OIL FROM ARGENTINA TO INDIA

(US $ Million) Year 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Value 34.13 27.23 1.15 0.00 . . . . . Trend Value 34.90 22.05 9.20 - 3.64 -16.49 -29.34 -42.18 -55.03 -67.88

60 40

Value in US $ mn.

20

0 -20

-40 -60 -80

03 20 4 -0 0 20 05 405 20 6 -0 7 -0 06 20 07 20 8 -0 9 -0 08 20

Argentina TREND
2 -1 11 20 1 -1 10 20 0 -1 09 20

year

IMPORT OF SOYA OIL FROM BANGLADESH TO INDIA

(US $ Million) Year 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Value 0.04 0.09 0.75 2.93 . . . . . Trend Value -0.45 0.49 1.42 2.35 3.29 4.22 5.15 6.08 7.02

Value in US$ mn.

0 Bangladesh -2 TREND
2 -1 11 20 1 -1 10 20 0 -1 09 20 9 -0 08 20 8 -0 07 20 7 -0 06 20 6 -0 05 20 5 -0 04 20 4 -0 03 20

year

DATA INTERPRETATION & FINDINGS

India produce about 5 million tons of bean with an average yield of 1 ton / has 5% of the total soya bean production generally used for and feed, 10% for seed and 85% for oil extraction. Oil yield is about 17.65% and that of soya meal is 82.35%. about 85% of the total soya meal produced in India is exported and the balance 15% is used domestically in food and feeds. Through the country gets foreign exchanged equivalent of Rs. 20000 million annually, the people of the country are deprived of the precious dietary protein source for which there is a shortage. The major problems in food uses of the present soya meal are residual hexane, protein quality and the microbial load. However, this could be checked and edible grade soya meal can be produced from the existing Soyabean solvent extraction plants. The typical composition of soya meal is 44% proteins 5% oil 7% fiber and 12% moisture. The fiber and protein contents are dehulled and solvent extracted soya meal may not be more than 3% and less than 48% respectively. Total Import of Soya Oil: In 2003-04 India imported soyabean oil worth 74.66 US $ Million, in 200405 worth 46.76 US $ Million, in 2005-06 worth 11.79 US $ Million and in 2006-07 worth 8.15. So due to sufficient soya production at home total import is continuously decreasing. According to trend analysis in future total import of soyabean oil will decrease.

Import of Soya Oil from USA :

In 2003-04 India imported soyabean oil worth 24.56 US $ Million, in 200405 worth 6.22 US $ Million, in 2005-06 worth 8.72 US $ Million and in 2006-07 worth 5.22. So the import of soya oil from USA is decreasing year by year. According to trend analysis in future import will decrease. Import of Soya Oil from Brazil : In 2003-04 India imported soyabean oil worth 10.39 US $ Million, in 200405 worth 11.80 US $ Million, in 2005-06 worth 1.17 US $ Million and in 2006-07 there is no import of soya oil from Brazil. So the import of soya oil from Brazil is decreasing year by year. According to trend analysis in future import will more decrease. Import of Soya Oil from Argentina : In 2003-04 India imported soyabean oil worth 34.13 US $ Million, in 200405 worth 27.23 US $ Million, in 2005-06 worth 1.15 US $ Million and in 2006-07 there is no import of soya oil from Argentia. So the import of soya oil from Argentina is decreasing year by year. Negative trend in trend analysis also display decrease in import in future. Import of Soya Oil from Bangladesh : In 2003-04 India imported soyabean oil worth 0.04 US $ Million, in 200405 worth 0.09 US $ Million, in 2005-06 worth 0.75 US $ Million and in 2006-07 worth 2.93 from Bangladesh. So the import of soya oil is incresing year by year. Positive trend in trend analysis also display increase in import in future. Although India doesnt import much from Bangladesh but this is only country which shows positive trend of import.

Chapter 5 CONCLUSION

CONCLUSION

If we see the objectives of the study it basically aims at identifying the import of soya oil and study the factors affecting the import. So by analysis it can be said that India imports soya oil from USA, Brazil, Argentina & Bangladesh only. Argentina is the major importer of soya oil. Since India produce soyabean in sufficient quantity for domestic use. So there is not much requirement of import. Thats the reason after 2003-04 import is continuously decreasing year by year from USA, Brazil & Urgentina. Import of soya oil from Bangladesh is increasing since after 2003-04. But its very less as compare to Argentina, USA & Brazil.

In 2008-09 due to price rise in soya oil Govt. is planning to reduce custom duty to attract importers like Brazil & USA. The data collected shows that till 2006 each country has same trends and have less prospects in the near future. If custom duty is decreased there may be seen more import of soya oil from major importers like Brazil, USA & Argentina.

SUGGESTIONS
Soyabean processing industry should be treated as a high priority industry and providing it with all vital inputs including finance as affordable prices, subsidized to the extent necessary and insulated from scarcities and interruptions in supplies. Import duty on the import of modem plant and machinery should be reduced so that with the help of modem technology a quality product can be produced and its cost of production will also be reduced so as to become competitive in world market. Industrial licensing and registration policies to be regulated so as torn prevent sickness at all the sectors of industry. Government should provide a wide range of varieties having the desired quality attributes, in required quantities over extended periods at economic prices. The government should also set up large industrial states exclusively for edible oil meal manufacturing units and encourage even existing unit to gradually move to such industrial estates by offering suitable inducement. Infrastructural facilities needed for post harvest handling, storage and transportation should be provided at the costs the industry can bear. Research and development in the field of developing soyabean varieties should be encouraged so as to get higher yield with quality product.

 Product promotion and marketing of the process products to be undertaken in the domestic markets and on massive scale, full financial support to be provided by the government. The incidence of all kind of taxes, duties, and other Levis imposed by the central state and local government should be minimized or reduced to levels, which the industry can bear.

Chapter 6
Implications of the Study

For Government:
The research may be useful for Government to review its export policy so that procedural hassles can be minimized to enable exporters to apply their entire mind, time and energy on business.

For Exporters:
The research may be useful for exporters to increase there business volume. They can take decisions as per the statistical analysis. Exporters can work together with government departments for achieving the common goal of earning precious foreign exchange for the country.

For Researchers
The study gives indications of the export potential of the edible oil industry and gives an idea about what are the factors affecting export of edible oil. So there is a scope for finding the reasons for such behavior due to factors. Study opens several avenues for further study in terms of; Export policy Exporters role Product quality

BIBLIOGRAPHY

John W. Alexander Economic Geography (Third edition). Ashok K. Ghosh: New Delhi www.sopa.org www.soyatect.com www.financialexport.com www.apo-tokyo.org