Edible oil imports down 5% on year since November
14/06/2024 (Financial Express) - The imports of edible oils – palm, soybean and sunflower — declined by 5% to 8.67 million tonne (MT) in first seven months of the 2023-24 oil year (November-October) compared to the same period last oil year.
BV Mehta, executive director, Solvent Extractors’ Association of India (SEA) told FE that the lower imports in the current oil year so far are due to bumper domestic crops of mustard and soybean and rise in the global prices.
Palm oil imports were 4.97 MT during November-May period (2023-24), a 7% drop from the previous year. Soybean imports were 1.59 MT, a decline of 22% on year while sunflower import rose by 20% to 1.99 MT in the current oil year on year.
While floods in Brazil and workers’ strike in Argentina hit crushing which lead to spike in global prices of soybean oil, sunflower supplies from Russia and Ukraine were reduced because of the ‘off season’, Mehta said palm oil which constitutes a major import, prices remained more or less stagnant both in the international and domestic market.
The total import of edible oil in the current oil year is projected to decline to around 16 MT, from a record 16.47 MT in 2022-23 oil year.
“The rise in price of sun oil and soybean oil, jacked up the mustard seed price which was ruling above the minimum support price (MSP) of Rs. 5650/quintal to over Rs.6200/quintal, which is a positive signals to farmers for increasing oilseeds area in ensuing kharif season,” Mehta said.
As of June 1, India’s edible oil stocks including those at ports and pipelines stood at 2.41 MT, a decline from 2.94 MT reported a year ago.
Soybean oil was sourced from Argentina and Brazil, while sunflower oil was sourced from Russia and Ukraine.
India’s import of edible oils – palm, soybean and sunflower – rose 17% on year to a record 16.47 MT in the 2022-23 oil year, helped by lower import tariffs of only 5.5% on crude oil imports.
India imports about 58% of the total annual edible oil consumption of around 24 to 25 MT. In terms of share in domestic output, the share of oils includes mustard (40%), soyabean (24%) and groundnut (7%), among others.
Earlier this year, the government last month had extended the lower import duty structure for palm, soybean and sunflower oils by a year till March 31, 2025, which the industry had stated would adversely impact processing and prices of domestic oilseeds.
Currently, crude palm, soybean and sunflower oil imports attract only a 5% agri infra cess and a 10% education cess, resulting in a total tax incidence of 5.5%. Because of record imports, the domestic prices of edible oil varieties such as mustard and soybean have been impacted.
Mustard oil and refined oil prices dropped sharply by 8.59% and 10.89% respectively in May on year while overall inflation in oils and fats category declined 6.71%.