Edible oil imports up 28% in July as traders buy more RBD palmolein, soya oil

Imports of edible oils increased by 28.02 percent in July compared to June after a sharp rise in shipments of palm oil and soybean oil.

Solvent Extractors Association of India (SEA) data shows that India imported 12.05 liters of edible oil in July 2022 as against 9.41 liters in June 2022. The country’s imports of edible oil were 9.17 liters in July 2021.

PV Mehta, CEO of SEA, said international prices for edible oils have fallen sharply in the past two months. Palm oil decreased by $625 a ton, soybean oil decreased by $370 a ton, and sunflower oil decreased by $450 a ton.

He said the domestic price has also moved in tandem downward in the past two months. The wholesale price of RBD palmolein has been reduced by more than Rs 25,000 per ton, refined soybean oil by Rs 24,000 per ton and sunflower oil by about Rs 20,000 per ton.

However, he said, the depreciation of the rupee since March and higher freight for palm oil shipments have partially restricted the transfer of these benefits to importers and consumers.

India’s RBD palm imports rose to 43,555 tons in July compared to 13,895 tons a year earlier, and crude palm oil imports rose to 4.80 liters in July (4.51 liters in July 2021).

RBD palm imports increased to 11.44 liters in the first nine months of 2021-22 (November to October) from 43,271 tons in the corresponding period last year. He said the import of RBD palmolein during the first nine months of the 2021-22 oil year was mainly due to Indonesia’s higher export tax on CPO and lower duties on RBD palmolein. This led to Indonesian exporters preferring RBD palm discount to drive their exports. RBD palmolein makes up 12 percent of total edible oil imports, which was only half a percent last year. This affected CPO import.

He said that the Indonesian palm oil is currently under pressure due to the increasing stocks. Indonesia lowered the threshold for applying export tax to CPO to the reference price of $680 per ton, down from $750 per ton previously.

Soft oils

Total imports of palm oil (including palm oil CPO and RBD palmolein) decreased to 48.61 liters during the November-July period compared to 56.15 liters in the previous year.

Imports of soft oils such as soybean oil and sunflower oil rose to 48.34 liters in the first nine months, compared to 37.55 liters in the same period last year.

Mehta attributed this growth to the rise in soybean oil imports at 33.30 liters compared to 22.30 liters.

India imported 20.72 liters of degummed soybean oil from Argentina, 8.85 liters from Brazil and 1.59 liters from the United States.

India’s imports of crude sunflower oil were stable at 15.03 liters during the November-July period compared to 15.24 liters in the same period last year.

Total imports of sunflower oil from Ukraine amounted to 8.42 liters (before March). There was no supply of sunflower oil from Ukraine from March onwards after its war with Russia.

However, he said, Russia and Argentina have shifted to become suppliers of sunflower oil to India now. India bought about 1.55 liters of sunflower oil in July, mostly from Russia (50,336 tons) and Argentina (91,627 tons).

The current price differential of $350-400 per ton between soft oils and palm oil is encouraging more palm oil imports despite the 5.5 percent duty payable on CPO imports. Higher prices appear to have prompted Indian farmers to push for higher-than-expected soybean plantings this year, Mehta said, regardless of unusually large stocks of old crops.

All-in-one vegetable oil

Total imports of vegetable oils (including edible and non-edible oils) reached 12.14 liters in July compared to 9.80 liters last year, an increase of 24 percent. This included 12.05 liters of edible oils and 9,069 tons of non-edible oils.

Total imports of vegetable oils during the first nine months of the oil year amounted to 99.74 liters, compared to 96.54 liters a year earlier.