India’s import of edible oils – palm, soybean and sunflower is projected at a record 17 million tonne (MT) in the current oil year (November 2022-October 2023), trade body Solvent Extractors Association of India (SEA) said on Friday.
Last year, exports amounted to 14 MT. The volume of cooking oil imports is expected to be the highest since 2016-17 when the country imported 15.1 MT of oil, SEA stated. The SEA attributed the decline in global prices to rising domestic demand and lower import duty has pushed up imports. During November-September in the current oil year, edible oil imports have surged by 20% to 15.46 MT compared to the same period last year.
SEA has drawn attention to the issue of the increase in refined palmolein oil, which poses a “serious threat to the domestic edible oil refining capabilityIndustry sources said that despite adequate domestic availability, a sharp drop in domestic edible oil prices has pushed up demand and per capita consumption has increased with falling domestic edible oil prices in recent months.
The trade body has stated that the import of RBD or refined palm oil has surged which now constitutes over 25% to total palm imports. “This surge has severely impacted the refining industry, which is grappling with massive overcapacity,” SEA has stated in a note.
Imports of crude soybean and sunflower during the November-September period in the current oil year were 38.87 MT and 1.79 MT, respectively. Soybean oil was sourced from Argentina and Brazil, while sunflower oil was sourced from Russia and Ukraine.
The landed prices of palm oil (at Mumbai port), which holds close to a 60% share in the country’s import basket, declined by 6.1% to $880/tonne on Friday, compared to the $938/tonne a year ago. Landed prices of crude soybean and sunflower oil have declined by 28.7% and 36% to $971/tonne and $895/tonne, respectively.
Currently, crude palm, soybean, and sunflower oil imports attract only a 5% agri infra cess and a 10% education cess, resulting in a total tax incidence of 5.5%. Retail inflation in the ‘oil and fats’ categories declined by 14.04% last month compared to the previous year.
Retail mustard oil prices declined by 18.44% in September 2023 compared to the previous year. Inflation in refined oil (sunflower, soybean, and palm) also declined by 22.6% last month compared to the previous year due to a decline in global prices of edible oil and a surge in imports.
India imports about 56% of its total annual edible oil consumption of around 24 to 25 MT. In terms of share in domestic output, the share of oils includes mustard (40%), soybean (24%), and groundnut (7%) among others.