Edible oil imports fell 20 percent in June due to increased inventories in the country which appear to have had an impact on shipments.
Edible oil imports into the country amounted to 0.96 million tonnes (mt) in June 2021 compared to 1.21 mt in May 2021, registering a decline of 20.08 percent.
According to data released by the Solvent Extractors’ Association (SEA) of India, the import of palm oil (which includes crude palm oil and RBD palmolein) has decreased to 5.87 lakh tonnes (lt ) in June against 7.69 lt in May – a decrease of 23.66 percent.
Imports of sweet oils (which include soybean and sunflower oils) fell to 3.81 lt (4.43 lt), down 13.88 percent.
BV Mehta, executive director of SEA of India, attributed the drop in imports in June to increased stocks in the domestic market during the period.
The country’s edible oil stock stood at 1.98 mt on July 1 against 1.96 mt on June 1.
Figures of the year
However, Mehta said, there has been an overall growth in edible oil imports in the first eight months of the 2020-21 oil year (November-June).
The country imported 5.14 tons of palm oil between November and June 2020-21, compared to 4.23 tons in the corresponding period of 2019-20, registering a growth of 21.49%.
The growth in palm oil imports during the period is due to the lower tariff advantage in the country over soft oils, Mehta said.
Sweet oil imports fell to 3.3 million tonnes in November-June 2020-21 from 3.84 million tonnes a year ago.
Palm oil producers such as Malaysia and Indonesia were the main suppliers of the product to India during the period. Malaysia was the main supplier of CPO (crude palm oil) at 2.61 mt, followed by Indonesia at 2.20 mt during the period from November 2020 to June 2021.
India imported 1.60 t of degummed crude soybean oil from Argentina; and 1.18 tonnes of crude sunflower oil from Ukraine, 1.33 tonnes of Russian lakh and 1.11 tonnes of Argentine lakh.
Overall import of vegetable oil (which includes both edible and inedible oil) increased to 8.67 mt in the first eight months of the 2020-21 oil year from 8.26 mt over the corresponding period of 2019-20, up 5 percent.
Refiners, farmers affected
However, SEA believes that recent government notifications will have an impact on the importation of palm products into India.
In a notification dated June 29, the government reduced import duties on CPO, RBD palmolein, RBD palm oil and others. As a result, the effective duty of CPO was reduced by 5.50 percent, while the RBD duty on palmolein by 8.25 percent and RBD palm oil by 18.15 percent until September 30.
On June 30, the government decided to freely allow palmolein and RBD palm oil until December 31.
Mehta said: “Both notifications will have an impact on the importation of palm products into India, to the detriment of the interests of domestic refiners and oilseed producers. It will also open floodgates for importing refined oils from Nepal and Bangladesh under the zero-duty SAFTA deal, which has seriously affected refiners in eastern and northern India.
He said Indonesia and Malaysia have higher duties / levies on CPO than on RBD palmolein. This could lead to increased exports of refined palm oil to India in the coming months to the detriment of the CPO, he said.