India’s edible oil imports are likely to remain in the same range during the oil year 2021-22 as that of the past two oil years (November to October), according to the Solvent Extractors’ Association (SEA) of India.
Presenting a paper through a virtual platform at the Indian Palm Oil Conference organised by the Indonesian Palm Oil Association (commonly known as GAPKI), BV Mehta, Executive Director of SEA of India, said that the import of edible oils during the oil year 2021-22 will be around 13 million tonnes (mt). India imported 13.13 mt of edible oils during the oil year 2020-21 and 13.18 mt during 2019-20.
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He said that the domestic consumption of edible oils has been affected due to the current high price in the international market. This has resulted in the demand destruction and slowdown in consumption.
He said the current duty reduction on crude palm oil (CPO), soyabean oil and sunflower oil, which was announced by the Central government on October 14, is valid only until March 31. The duty will be reverted to the earlier rates that were effective from September 11. This will lead to an increase in the duty to the tune of 16 to 20 per cent on the above-mentioned products
Mehta said that Indian bulk consumers are very sensitive to price and shift to other oils in no time.
The CIF prices for RBD palmolein has gone up by 59 per cent in the last one year and CPO by 68 per cent. Added to this, the CIF prices of soya oil prices went up by 47 per cent and sunflower oil by 29 per cent. Due to the increase in the global prices of these commodities, the domestic prices also went up.
Stating that this made the imports expensive, he said it even compelled the Centre to reduce the duty to provide relief to consumers.
Domestic oilseed status
Making a mention about the current status of the oilseed sector in India, Mehta said India harvested a bumper crop output. The soyabean crop output is estimated at 12 mt and groundnut crop at 8 mt (kharif 6.5 mt and rabi at 1.5 mt).
He said the rabi rapeseed crop acreage is up by 30 per cent and the anticipated crop output is at 10 mt. This is due to better realisation in the rapeseed crop during the harvest time.
With this, the overall availability of vegetable oils during the oil year 2021-22 is expected to be higher by 0.5 mt to 0.7 mt, he said, adding, the domestic vegetable oil production stood at around 9.5 mt during 2020-21.
Stating that the current domestic soyabean price is much higher than the MSP of ₹3,950 a quintal, he said the prevailing high price of vegetable oils is likely to shrink the demand of edible oil in the current year. This may result in lower or flat imports of the edible oils.
He said the consumption of palm oil in India is now over 37 per cent of the total oil consumption. This is followed by soyabean oil at around 22 per cent, and mustard oil and sunflower oil at around 12 per cent each.
HoReCa (hospitality, restaurants and catering) is the major consumer of palm oil in the country, while palmolein is best known for its multi-time frying property, cost efficiency and affordability.
Though there was a fall of 30 per cent in the consumption of palm oil during 2019-20 due to the Covid pandemic, the demand from the HoReCa segment has slowly recovered following the near-normal situation in the country, he said.
The import of palm oil increased from 7.2 mt in the oil year 2019-20 to 8.3 mt during the oil year 2020-21. He attributed this growth to the reduction in the import duty on CPO and on lifting the restrictions on the import of RBD palmolein till December 31.
He said that Indonesia is losing its palm oil share in the Indian market to Malaysia due to its high export duty and levy on the commodity. “The Indonesian government must revisit its duty structure to maintain its share in the Indian market,” Mehta added.