A surge in the import of vegetable oils in India has prompted the domestic oilseed crushing and refining industry to cut operating capacity to a historic low in order to sustain in the business for future.

The apex industry body, Solvent Extractors’ Association (SEA), reported 26 per cent jump in India’s import of vegetable oils (both crude palm oil or CPO and refined, bleached and deodorized or RBD) to 1.45 million tonnes in March 2019 versus 1.15 million tonnes in the corresponding month last year. In February also, import of vegetable oil had risen by 7.4 per cent to 1.24 million tonnes from 1.16 million tonnes in the comparable month a year ago.

Despite being a deficit country with around 60 per cent of India’s demand being met through imports primarily from Malaysia, Indonesia and Argentina, sustained growth in import has caused a major worry for domestic oilseed crushing and refining units. Since the imported refined oil is cheaper than the domestic counterpart, packaging units here prefer to buy refined oil from overseas suppliers and pack in local units for a safe profit margin. Consequently, domestic refineries have been forced to reduce their operating capacity to a historic low of below 30 per cent in the absence of viability.

“Rising vegetable oil imports are always a worry for both Indian refineries and oilseeds farmers who wait to fetch better prices for their produce. This will be possible only when supply is restricted through various channels,” said D N Pathak, Executive Director, Soybean Processors’ Association (SOPA).


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