Vegetable Oil imports jump in June – demand prospects remain bright

The oilseed sector has revived in recent months, thanks to the growing importance of demand for food raw materials during the lockdown situation. Government’s various measures to boost Agricultural economy have helped edible oils and edible oilseeds prices to jump significantly post March 2020.

Major edible oils like Soya oil, Mustard oil or palm oils have jumped sharply in last few months because of growing domestic export demand and positive factors from global markets. India’s oilseed has recorded a sharp jump — nearly 54 per cent — in edible oil exports to 80,765 tonnes for 2019-20, according to government data. India had exported 52,490 tonnes of edible oils in 2018-19.

Vegetable oil inventory in the country are at historic lows. Though the off-take of vegetable oils edible oils remains subdued, but as lockdown restrictions are easing and trade between state/country borders are resuming gradually, demand prospects for oils and oilseeds are improving every month. Trade estimates indicate that the June-end inventory of vegetable oils is roughly 25% lower than the same period last year. The supply pipeline is quite empty and needs to be replenished in coming weeks. In fact reports say that due to depleting stocks, nearly whole of the imported arrivals during June has been absorbed. As a result supplies are running scarce, considering demand situation. Therefore import demand is expected to be strong in July and also in August month. Due to firming demand in domestic markets, imports during June month have been quite hefty.

Vegetable oils imports in the month of June 2020 have increased significantly versus May, due to rising domestic demand and increasing global edible oil prices. Imports in June were significantly up 64% to 1.16 MMT. Imports of CPO registered a 51% increase while soft oil imported posted growth of 87%. Home consumption in the country remains stable while retail consumption is on the rise and is expected to rise further ahead of the festival season. There are hopes that because of gradual opening up of the economy and forthcoming festive season demand will be able to revive the lost retail demand. Online cooked food supply business is also resuming which will be another positive factor in improving vegetable demand on the whole.  Therefore demand outlook remains bright for vegetable oil edible oils in near to medium term.