India Vegoil: SEA Eyes 7.5% Import Duty Increase
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India’s vegetable oil imports rose by 21 percent to 81.1 lakh tons (8.1 million tons) in the first six months of the current oil year, driven by increased shipments of refined palm oil which is a cause of concern, industry body Solvent Extractors Association of India (SEA) said on Friday. Vegetable oil imports stood at 67.07 lakh tons in the same period of the 2021-22 oil year. India is the world’s leading vegetable oil buyer. Oil year runs from November to October.
In April, vegetable oil imports remained lower by 10 percent at 10.50 lakh tons compared to the previous month’s 11.72 lakh tons. According to the SEA, “Increase in import of RBD palm olein in the first six months of the current oil year reported at 11.01 lakh tons is nearly 22 percent of the total palm oil import, depriving domestic industry of capacity utilization.” The palm oil refining industry in the country is heavily suffering from very low-capacity utilization due to excessive import of RBD palm olein, thus getting transformed into mere packers, it said in a statement. To address this problem, SEA said the duty difference between crude palm oil (CPO) and refined palm oil needs to be increased from the current 7.5 percent to at least 15 percent by imposing an additional 7.5 percent agriculture cess on RBD Palm olein.
Due to an increase in the shipment of RBD palm olein, the share of palm oil has risen to 61 percent in the total vegetable oil imports from 49 percent, while soft oils imports reduced in the first six months of the current year. Palm oil imports, both crude and refined, rose to 49.09 lakh tons during the November-April 2022-23 oil year from 32.25 lakh tons in the year-ago period because of the price parity.
Although the total import of soft oils — sunflower and soybean oils — remained lower at 30.92 lakh tons in the first half of the current oil year, shipments of these two vegetable oils have seen a sharp jump, the SEA said. As of May 1, edible oil stocks were estimated to be 33.74 lakh tons at various ports, slightly lower than 34.47 lakh tons
in the previous month. India imports palm oil mainly from Indonesia and Malaysia and a small quantity of soft crude oil, including soyabean oil from Argentina. Sunflower is imported from Russia and Ukraine.
According to AgFlow data, India imported 1.9 million tons of Vegetable Oil in May. In March, sunseed oil led others with 0.1 million tons, followed by soybean oil (42,500 tons) and Palm Oil (14,000 tons). Argentina shipped 43,950 tons of sunseeds to India, followed by Ukraine (42,500 tons) and Romania (15,854 tons).
Indian VegOil Import Forecast
India is likely to import around 14.37 million tons of vegetable oil during the current oil year (October 2022-September 23) against 14.07 mt in 2021-22, according to Sudhakar Desai, President of the Indian Vegetable Oil Producers’ Association (IVPA). Presenting a paper on “Indian palm oil outlook and its impact on prices” at UOB Kay Hian Palm Oil Outlook Seminar in Malaysia in March, he said palm oil import could be in the range of 9.3 mt in 2022-23 against 7.99 mt in 2021-22.
He estimated the import of soyabean oil at 3.01 mt during 2022-23 (4.05 mt in 2021-22) and sunflower oil at 2.01 mt (1.93 mt). He further said that domestic production of vegetable oils would go up to 9.68 mt in 2022-23 against 9.06 mt in 2021-22 due to an increase in the production of soybean and mustard crops. With consumption bouncing back in India by about 5 percent due to a fall in prices, he said, there has been an increase in imports.
Other sources: ECONOMIC TIMES
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