India. Vegetable oil imports projected at 150 lakh tonnes in 2016-17

16.11.2016

Driven by a surge in import of soya oil and sunflower oil, India’s vegetable oil imports are likely to rise by 200,000 tonnes to touch 150 lakh tonnes in oil year (November to October) 2016-17, experts have projected.

According to a paper presented by Dorab Mistry, Director, Godrej International Ltd, on the price outlook for vegetable oils for 2016-17, soya oil imports are likely to be lower, while sunflower oil imports will increase with a rise in palm oil imports.

Mistry also projected that domestic vegetable oil production will be at 1 million tonnes in 2016-17 on a higher oilseed crop. The per capita consumption is projected at 18 kg.

For the oil year ended October 2016, Mistry pegged vegetable oil imports at 148 lakh tonnes, against 146.12 lakh tonnes in 2014-15. Soya oil imports over the past four years have increased four times, from 1,030 tonnes in 2012-13 to a projected 3,800 tonnes in 2016-17.

Lower import duty

“On September 23, the government lowered the import duty on all palm oil — crude as well as refined — by 5 per cent. It did not alter the import duties on soft oils. Therefore, as of today, palm enjoys a 5 per cent advantage in terms of import duty over soya, sun and rape oils,” stated Mistry, projecting that this concession would be reversed on strong lobbying by refiners to get the differential between import duty on crude palm oil (CPO) and refined palm enhanced from the current 7.5 per cent.

Meanwhile, according to the Solvent Extractors’ Association of India (SEA), India imported more edible oil in the last few years due to stagnant oilseed production and rising domestic demand. India’s dependence on imported oil has risen to 70 per cent.

Soft oils include soya bean oil, sunflower oil and rapeseed oil. Import of soft oils grew 42 per cent in 2015-16, the highest in five years, while palm oil imports slowed to 58 per cent, against 66 per cent in 2014-15.

“Since April 2016, the landed price of RBD palmolein and CPO have remained more or less the same at $709 and $704 per tonne, thereby encouraging larger import of RBD palmolein at the cost of CPO. The spread between palm oil and soft oil also reduced encouraging larger import of soft oils,” the SEA said.

Soybean oil import is increasing from year to year. In 2011-12, the import was just 10.8 lakh tonnes, and increased to 42.4 lakh tonnes in 2015-16. This was due to a stagnant domestic soybean crop coupled with attractive price in international market, thanks to heavy supply.


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