India’s edible oil imports may slow down in near term

Atul Prakash

Mumbai: Edible oil imports into India, the world’s largest buyer, are likely to fall in the short term as new crop arrivals offset higher demand, a leading industry official said on Wednesday. Imports are seen at around 300,000 tonnes a month between November and January, Parvez H Kader, managing director of India’s largest vegetable oil importing firm, Liberty Oil Mills Ltd said. That compares with 397,000 tonnes of imports in September and 654,000 tonnes in August, against 499,000 tonnes and 477,000 tonnes, respectively last year.

India imported an average of 400,000 tonnes of edible oil every month between November 2000 and January. “Domestic oilseed arrivals are picking up and the refineries are working perfectly,” Mr Kader said, adding that increased supplies would satisfy additional demand during the peak festive season in November for Diwali.
Local supplies of winter oilseed crops, mainly soybean and groundnut, have risen significantly in the western and central parts of the country, traders say. Imports of refined, bleached and deodorised (RBD) palmolein at western Indian ports may fall drastically in the next couple of months due to depressed prices of local oils, he said. But importers in southern India, where domestic oilseeds production is not much during winter, would continue to buy larger volumes of RBD palmolein, he said.

India mainly imports palm oil from Malaysia and Indonesia and soy oil from South America. Edible oil imports rose to 4.56 million tonnes in the first 11 months of the oil year to October from 3.97 million in the same period the previous year, the Solvent Extractors’ Association of India says. “About 350,000 tonnes of edible oil may arrive in India in October, including 150,000 tonnes of soybean oil,” Mr Kader said. But imports of soybean oil are expected to fall to 100,000 tonnes in November, he said. “Palm oil imports are likely to remain steady at 200,000 tonnes each in October and November.”

Consumption and prices
Mr Kader estimated India’s edible oil consumption at 800,000 to 850,000 tonnes each in the months of November and December, and domestic supplies at about 500,000 to 550,000 tonnes. India has currently accumulated edible oil stocks of nearly 550,000 tonnes, he said. “Domestic oil prices are likely to remain depressed in the next few months,” Mr Kader said, adding that prices may firm for a very short period during the peak festival season.

Local prices have fallen because of increased harvesting of soybean and groundnut crops, and a cut in the base import prices by the government over a week ago, traders say. India lowered its base import price of crude palm oil (CPO) to $286 per tonne, from $337 fixed in August to prevent underinvoicing. The base price of RBD palmolein fell to $307 per tonne from $372.

India imposes a basic import duty of 75 per cent on CPO, 85 per cent on RBD palmolein and 45 per cent on soy oil. Local prices of RBD palmolein fell to Rs 25,700 ($535.7) per tonne from Rs 28,100 before the base price revision, while refined soy oil was quoted at Rs 25,600 a tonne, against Rs 26,300. ($1=47.97 Indian rupees)

— Reuters