The country’s palm oil imports in February dropped 1.1% from a year earlier to 751,703 tonne as soyabean oil imports jumped, the Solvent Extractors Association of India (SEA) said on Friday.
Soyabean oil imports surged 65% to 2,20,376 tonne in February, while sunflower oil imports eased 3.7% to 2,00,358 tonne, the trade body said.
India is the world’s biggest importer of edible oils. Import of vegetable oils during February 2019 stood at 12,42,533 tonne against 11,57,044 tonne in February 2018, which comprised 1,182,062 tonne of edible oils and 60,471 tonne of non-edible oils, showing a 7.4% rise.
The overall import of vegetable oils during November 2018-February 2019 was 4,862,849 tonne, against 4,785,778 tonne, an increase of 1.61%, thanks to higher import duty.
The country’s refined palm oil imports in February jumped 19.1% to 241,101 tonne as a reduction in import tax made it more attractive than crude palm oil, the SEA said.
India buys palm oil from Indonesia and Malaysia, with its soyabean oil mainly imported from Argentina and Brazil, and purchases sunflower oil from Ukraine.
In the first four months of the 2018/19 marketing year ending October, India has imported 4.61 million tonne of palm oil, down 1% from a year ago, it said.
The ministry of finance with effect from January 1, 2019, reduced import duty on palm oil and also cut the duty difference between crude and palm oil from 10% to 5% on palmolein to be imported from Malaysia.
This has resulted with the sharp increase in import of RBD Palmolein and nearly doubled to 2,41,101 tonne in February 2019 from 130,459 tonne in December 2018, up by 85%, at the cost of reduced import of crude-palm-oil (CPO).
This is likely to increase in coming months, considering exports of RBD Palmolein lined up from Malaysia to be shipped to India. This development has the huge potential of hurting the domestic palm refining industry if it is not corrected.
Stock of edible oils as on March 1, 2019, at various ports is about 915,000 tonne (470,000 tonne of CPO, 235,000 tonne of RBD Palmolein , 90,000 tonne of degummed soyabean oil and 1,20,000 tonne of crude sunflower oil and about 12,80,000 tonne in pipelines.
Total stock at ports and in pipelines stood at 21,95,000 tonne, which increased by 85,000 tonne from 21,10,000 tonne, as on February 1, 2019.
India’s monthly requirement, which operates at 30-day stock, is about 19 lakh tonne, against which currently holding stock is over 21.95 lakh tonne and equivalent to 35-day requirement.
During November 2018-February 2019, import of refined oil (RBD Palmolein) increased to 647,900 tonne from 607,359 tonne in the year-ago period, however, import of crude oil decreased and reported 39,63,912 tonne, against 40,48,091 tonne during the corresponding period last year.
In the November 2018-February 2019 period, palm oil import has marginally increased to 3,070,466 tonne against 3,034,514 tonne in the year-ago period. However, soft oils import decreased to 1,541,346 tonne from 1,620,936 tonne in the year-ago period.
The ratio is tilting in favour of palm oil. In one year, in international market, prices of various edible oils have gone down in 5%-20% due to glut in the world market, but rupee is depreciated by nearly 10% in a year.