India's vegetable oils import rose 16 per cent to 167.1 lakh tonnes in the current oil year that ended in October 2023, driven by lower duty on certain edible oils, industry body SEA said on Monday.
The country had imported 144.1 lakh tonnes of vegetable oils in the previous 2021-22 oil year (November-October).
Out of the total vegetable oils, much of the imports were edible oils at 164.7 lakh tonnes, while non-edible oils were only 2.4 lakh tonnes during 2022-23 oil year.
India is a leading vegetable oil buyer in the world.
According to Mumbai-based Solvent Extractors Association of India (SEA), "Import of edible oils during the 2022-23 oil year has surged to 164.7 lakh tonnes. This increase of 24.4 lakh tonnes from previous year is driven by the current low of 5.5 per cent duty on crude palm oil, soybean oil and sunflower oil."
This influx of imports has transformed India into a prime destination for excess oil supplies, it said in a statement.
Notably, RBD Palmolein imports constitute over 25 per cent of the total palm oil imports, significantly impacting the domestic refining industry, which is grappling with a significant underutilization of its installed capacity, it noted.
In value terms, SEA said the country's edible oil imports were worth Rs 1.38 lakh crores in 2022-23, lower than Rs 1.57 lakh crores in 2021-22 and 1.17 lakh tonnes in 2020-21.
As on November 1, SEA estimated stocks at ports to be approximately 33.0 lakh tonnes, down by about 3 lakh tonnes from previous month, due to lesser import and higher consumption in festival season.
The country's import has gradually increased during the first quarter and slightly slowed down in the second quarter. However, imports increased again in the third quarter due to sharp reduction in domestic prices of edible oils. Import has declined in the fourth quarter due to larger stock in the pipeline and at the ports, it added.
Among palm oils, import of RBD Palmolein increased to 21.1 lakh tonnes, from 18.4 lakh tonnes during the 2022-23 oil year, while crude palm oil (CPO) jumped to 75.9 lakh tonnes from 54.9 lakh tonnes in the said period.
Import of crude palm kernel oil (CPKO) rose to 94,148 tonnes during 2022-23, from 79,740 tonnes in the previous oil year.
SEA said total import of palm products increased sharply due to price parity during the 2022-23 oil year, and thus increasing the share of palm oil to 59 per cent from 56 per cent.
Among soft oils, import of sunflower oil increased to 30 lakh tonnes during 2022-23 oil year, from 19.4 lakh tonnes in the previous year due to zero import duty till June 15. This led to reduction in import of soybean oil to 36.8 lakh tonnes from 41.7 lakh tonnes in the previous year.
"Import of RBD Palmolein increased sharply as Indonesia was discounting the RBD Palomlein over CPO and passing off the benefit of higher duty on CPO and lesser on RBD Palmolein...," the SEA said.
India imports palm oil mainly from Indonesia and Malaysia and a small quantity of crude soft oil, including soyabean, from Argentina. Sunflower oil is imported from Ukraine and Russia.