|
In August, India witnessed a significant surge in its vegetable oil imports, which rose by 33 percent year-on-year to reach 18.66 lakh tonnes. This increase can be attributed to the combination of reduced import duties and a resurgence in demand following a decline in domestic vegetable oil prices, as reported by the Solvent Extractors' Association (SEA), an industry body.
For context, in August 2022, India imported 14.01 lakh tonnes of vegetable oil, highlighting the substantial growth in imports during the same period in 2023.
Furthermore, during the first ten months of the 2022-23 oil year (November-October), India's total vegetable oil imports escalated by 24 percent, reaching 141.21 lakh tonnes compared to the 113.76 lakh tonnes in the previous year.
According to SEA's data breakdown, edible oils constituted 18.52 lakh tonnes of these imports, with non-edible oils accounting for 14,008 tonnes. Notably, palm oil imports alone amounted to 11.28 lakh tonnes in August.
SEA predicts that if the trend in edible oil imports continues, India could potentially achieve a record-breaking import of 160 to 165 lakh tonnes during the current oil year ending in October 2023. It's worth noting that the highest ever import of vegetable oil by India was recorded at 151 lakh tonnes in the 2016-17 period.
The surge in imports can be attributed to several factors. Despite adequate domestic availability, a sharp decline in domestic edible oil prices has stimulated demand, as evident from the August data. Additionally, crude palm oil imports have regained competitiveness when compared to soybean and other oils. In August, India imported 8.24 lakh tonnes of crude palm oil, slightly down from the 8.41 lakh tonnes imported in the previous month.
This substantial increase in imports can be attributed to the current low import duty of 5.5 percent on crude palm oil, soybean oil, and sunflower oil. This has positioned India as an attractive destination for surplus oil supplies. India primarily imports palm oil from Indonesia and Malaysia, along with a smaller quantity of crude soft oil, such as soybean oil from Argentina. Sunflower oil imports primarily originate from Ukraine and Russia.
|