In the year 2022-23, India witnessed a significant surge in vegetable oil imports, marking a notable rise from the previous year. Driven by reduced duties on specific edible oils, the imports escalated to 167.1 lakh tonnes, showcasing a 16% increase compared to the 2021-22 oil year.
The major bulk of these imports, accounting for 164.7 lakh tonnes, comprised edible oils, whereas non-edible oils stood at 2.4 lakh tonnes. India, being a prominent buyer in the global vegetable oil market, experienced a substantial inflow of 24.4 lakh tonnes in edible oils from the preceding year.
The Mumbai-based Solvent Extractors Association of India (SEA) attributed this surge to the prevailing 5.5% duty on crude palm oil, soybean oil, and sunflower oil. India emerged as a significant destination for surplus oil supplies, impacting the domestic refining sector with RBD Palmolein imports constituting a substantial part of total palm oil imports.
In terms of value, the country’s edible oil imports for 2022-23 were estimated at Rs.1.38 lakh crores, a decrease from the previous year’s Rs.1.57 lakh crores. Since, there is decrease in value; the volume of imports remained considerable, marking the nation’s enhanced presence in global oil trade.
SEA’s estimations indicated that port stocks as of November 1 were approximately 33.0 lakh tonnes, down by 3 lakh tonnes due to increased consumption during festive seasons and reduced imports.
The import trends varied across quarters, with a gradual increase in the first quarter, a slight slowdown in the second, a resurgence in the third due to lowered domestic prices, and a subsequent decline in the fourth quarter owing to higher existing stockpiles.
Specifically, among palm oils, imports of RBD Palmolein and crude palm oil witnessed noticeable increments.The total import of palm products surged, with palm oil accounting for a higher share of 59% compared to the previous period’s 56%.
Moreover, while sunflower oil imports soared to 30 lakh tonnes due to zero import duty until June 15, there was a reduction in soybean oil imports, dropping to 36.8 lakh tonnes from 41.7 lakh tonnes.
SEA highlighted Indonesia’s strategy of discounting RBD Palmolein over CPO, affecting import trends. India primarily imports palm oil from Indonesia and Malaysia and a limited quantity of crude soft oil from Argentina, while sunflower oil predominantly comes from Ukraine and Russia.