Edible oil imports up 23% in February; refined palm oil shipments surge on lower duty

The overall import of vegetable oils during the first four months of 2021-22 oil year, which runs from November-October, went up 7 per cent to 46,91,158 tonnes as compared to 43,94,760 tonnes during the same period of the previous year. The import of RBD Palmolein jumped from 21,601 tonnes to 5,19,450 tonnes, SEA said.

In contrast, the import of Crude Palm Oil (CPO) declined from 24,89,105 tonnes to 15,62,639 tonnes, it added. India usually imports about 1.75-2 lakh tonnes of sunflower oil per month.

"The conflict between Russia and Ukraine has disturbed sunflower oil supply. In February 2022, about 1,52,000 tonnes arrived in India and similar quantity (is) likely to arrive in March 2022, as vessels which left before the war would arrive (at) Indian ports during the current month," the association said. If the war continues, there could be a decline in shipment of sunflower oil in later months, the SEA stated.

"However, short fall of sunflower oil availability could be met through higher domestic availability of soybean and mustard oils," it added. SEA pointed out that announcement made by the Indonesian government on March 9 to increase the limit of domestic sell from 20 percent to 30 percent would further reduce the Indonesian export volume and tighten the global export supplies.

"These two factors lead to high volatility in last few days in edible oil prices in international market," the statement said. The Ministry of Finance has reduced the Agriculture Infrastructure and Development Cess on imports of crude palm oil to 5 percent from the prevailing 7.5 percent, thus increasing the duty differential between CPO & RBD's oils to 8.25 percent from earlier 5.5 percent.

"This provided a minor relief to the beleaguered refining industry but not enough," SEA said. Indonesia and Malaysia are the major suppliers of palm oil to India. Crude Soybean Degummed Oil is mainly imported from Argentina and Brazil, while Crude Sunflower Oil is imported from Ukraine and Russia.