India's veg oil import jumps 18% in five months

Refineries take a hit following three-fold hike in RBD palmolein imports in first five months of current oil year

India's import of vegetable oil rose 18 per cent during the first five months of the current oil year (November 2015 to October 2016) to meet rising demand from consumer sectors.

Data compiled by the apex industry body the Solvent Extractors' Association (SEA) of India showed, India's import of vegetable oil (both crude and refined oil) stood at 6.31 million tonnes between November 2015 and March 2016, compared to 5.36 million tonnes during the corresponding period last year. Import of vegetable oils during March 2016 was reported at 1.19 million tonnes compared to 1.06 million tonnes in the comparable month last year.

Interestingly, in a major setback for Indian refineries, import of refined oil (refined, bleached and diodized or RBD) has risen sharply over the last three months. In fact, the share of RBD in the basket of imported vegetable oil has jumped to 18 per cent in March from 12 per cent in January.

"The alarming increase in import of RBD palmolein is seriously hurting the domestic refining industry," said B V Mehta, Executive Director of SEA.

The import of RBD palmolein during the first five months of the current oil year i.e. from November 2015 to March 2016 jumped by over 225 per cent from 305,000 tonnes to 997,000 tonnes and expected to increase further in the coming months.

"Import of RBD palmolein has increased significantly due to the fact that currently the landed cost of RBD olein (finished product) is lesser than crude palm oil (CPO - raw material). Owing to this situation, the domestic refining industry is facing severe crisis of under utilization of capacity and is on the verge of closure and justify increase in duty difference between crude and refined vegetable oils from 7.5 per cent to 15 per cent," said Mehta.

Meanwhile, current stock of edible oils as on April 1 at various ports is estimated at 890,000 tonnes (CPO 250,000 tonnes, RBD palmolein 170,000 tonnes, degummed soybean oil 310,000 tonnes, crude sunflower oil at 135,000 tonnes and 25,000 tonnes of rapeseed (canola) oil and about 1.42 million tonnes in the pipelines.

Total inventory at ports and in pipelines slumped to 2.31 million tonnes tonnes now from 2.36 million tonnes in March 2016.

India's monthly requirement stands at about 1.65 million tonnes and operates at 30 days stock against which currently holding stock stood at over 2.31 million tonnes equal to 42 days of consumption.