Edible oil imports declined 1st half of oil year.
By Sandip Das
The imports of edible oils – palm, soybean and sunflower — declined by 12% to 7.14 million tonne (MT) in the first six months of the 2023-24 oil year (November-October) compared to the same period last oil year.
According to BV Mehta, executive director, the Solvent Extractors’ Association of India (SEA), the lower lower imports in the current oil year so far are due to bumper domestic crops of mustard and soybean.
“The total import of edible oil is expected to decline in the current oil year compared to record imports of more than 16 MT in the 2022-23 oil year,” Mehta told FE.
Out of the total imports of edible oil in the 2023-24, palm oil imports was 4.21 MT, 14% decline from 4.9 MT of oil imported last year mostly from Indonesia, Malaysia and Thailand. Imports of soybean and sunflower oil during November-March of 2023-24 oil year was 1.26 MT and 1.58 MT respectively.
Soybean oil was sourced from Argentina and Brazil, while sunflower oil was sourced from Russia and Ukraine.
India’s import of edible oils – palm, soybean and sunflower – rose 17% on year to a record 16.47 MT in the 2022-23 oil year, helped by lower import tariffs of only 5.5% on crude oil imports.
“At the retail levels also prices have come down in India as edible oil markets are highly competitive and from July onwards once local demand picks up and festive season starts, we may see in improvement in prices,” Atul Chaturvedi, Chairman, Asian palm oil alliance, said.
Mustard oil and refined oil prices dropped sharply by 12.23% and 14.38% respectively last month on year while overall inflation in oils and fats category declined 9.43%.
Landed prices of crude palm oil (at Mumbai port), which hold a major chunk in the country’s import basket, declined marginally to $935/tonne on May 10, compared to $938/tonne a year ago. Import prices at Mumbai of crude soybean and sunflower oil were $965/tonne and $960/tonne respectively.
India imports about 58% of the 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%), soyabean (24%) and groundnut (7%), among others.
Earlier this year, the government last month had extended the lower import duty structure for palm, soybean and sunflower oils by a year till March 31, 2025, which the industry had stated would adversely impact processing and prices of domestic oilseeds.
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%. Because of record imports, the domestic prices of edible oil varieties such as mustard and soybean have been impacted.
This article has been republished from The Financial Express.