Edible Oil Imports Increased 28% in July as Traders Purchased More RBD Palmolein & Soya oil

The import of edible oils increased by 28.02 percent in July compared to June, owing to a significant increase in shipments of RBD palmolein and soyabean oil. According to data from the Solvent Extractors' Association of India (SEA), India imported 12.05 lakh tonnes (lt) of edible oil in July 2022, up from 9.41 lt in June 2022. In July 2021, the country imported 9.17 lt of edible oil.

According to SEA Executive Director BV Mehta, international edible oil prices have dropped dramatically in the last two months. Palm oil is down $625 per tonne, soyabean oil is down $370 per tonne, and sunflower oil is down $450 per tonne.

He claims that the local price has also fallen in the last two months. RBD palmolein's wholesale price has been reduced by more than 25,000 per tonne, refined soyabean oil by Rs 24,000 per tonne, and sunflower oil by nearly Rs 20,000 per tonne. However, he stated that the rupee's depreciation since March and high freight for palm oil shipments have limited his ability to pass on these benefits to importers and consumers.

India's RBD palmolein imports increased to 43,555 tonnes in July, up from 13,895 tonnes the previous year, while crude palm oil (CPO) imports increased to 4.80 lt (4.51 lt in July 2021).

RBD palmolein imports increased to 11.44 lt in the first nine months of the oil year 2021-22 (November to October) from 43,271 tonnes the previous year. He stated that the import of RBD palmolein during the first nine months of the oil year 2021-22 is primarily due to Indonesia's high CPO export levy and lower duty on RBD palmolein.

This encouraged Indonesian exporters to discount RBD palmolein in order to increase exports. RBD palmolein accounts for 12% of total edible oil imports, up from half a percent last year. This had an effect on CPO imports. According to him, Indonesian palm oil is currently under pressure due to rising stocks. Indonesia reduced the reference price for applying an export tax on CPO to $680 per tonne, down from $750 previously.  

The total import of palm oil (including both CPO and RBD palmolein) fell to 48.61 lt from November to July, down from 56.15 lt the previous year. Imports of soft oils such as soyabean oil and sunflower oil increased to 48.34 lt in the first nine months of the year, up from 37.55 lt the previous year.

India purchased 20.72 litres of crude soyabean degummed oil from Argentina, 8.85 litres from Brazil, and 1.59 litres from the United States.

During November-July, India imported 15.03 lt of crude sunflower oil, compared to 15.24 lt the previous year. Ukraine imported 8.42 litres of sunflower oil in total (prior to March). Following Ukraine's war with Russia, there was no supply of sunflower oil from March onwards.

However, he claims that Russia and Argentina are now major suppliers of sunflower oil to India. In July, India purchased approximately 1.55 lt of sunflower oil, primarily from Russia (50,336 tonnes) and Argentina (91,627 tonnes).

Despite the 5.5 percent duty on CPO imports, the current price differential of nearly $350-400 per tonne between soft oils and palm oil encourages greater imports of palm oil. According to Mehta, high prices have apparently motivated Indian farmers to increase soyabean plantings above expectations this year, despite the still unusually large old crop stocks.

The total import of vegetable oils (including both edible and non-edible oils) was 12.14 lt in July, up from 9.80 lt the previous year, a 24 percent increase. There were 12.05 lt of edible oils and 9,069 tonnes of non-edible oils in total. The total import of vegetable oils during the first nine months of the oil year was 99.74 lt, compared to 96.54 lt the previous year.