India's vegetable oil imports drop to 3-year low in Feb

The country's vegetable oil imports fell by 40% to a three-year low of 5.78 lakh tonnes in February this year due to sharp fall in shipments of palm oils, industry body SEA said today.

The country had imported 9.69 lakh tonnes of vegetable oil in the same month of the previous year.

The Solvent Extractors Association (SEA) also expressed concerns over higher import of cheaper refined palm oil, leading to under-utilisation of domestic refineries. Many of them are on the verge of closure.

India meets about 60% of its annual vegetable oil demand of 17-18 million tonnes through imports. Palm oils make up 80% of the country's total vegetable oil imports.

According to the SEA: "Import during February is the lowest in last three years, mainly due to heavy disparity in import of palm products which led to drastic reduction in import of crude palm oil (CPO)."

Palm oil imports dropped significantly by 99% to 4.03 lakh tonnes in February this year from 8.05 lakh tonnes in the year-ago period, it said in a statement.

Among palm oils, crude palm oil (CPO) shipments fell by 60% to 2.69 lakh tonnes from 6.70 lakh tonnes, but import of refined crude variant rose by over 10% to 1.65 lakh tonnes from 1.48 lakh tonnes in the review period.

The SEA said import of RBD palmolein has risen as global prices of this refined variant have become cheaper by USD 15-20 per tonne as compared to CPO.

"In view of increased import of RBD Palmolein in last two years, capacity utilisation of domestic refiners reduced from 55-60% to 30-35% and many units are the verge of closure," it said.

Import of non-edible oils fell to 9,431 tonnes in February this year, compared to 14,999 tonnes in the same period last year, the SEA data showed.

As on March 1, edible oils stock at various ports is estimated at 4.75 lakh tonnes, of which CPO is 2.40 lakh tonnes. About 7,70,000 tonnes of edible oil is in the pipeline.

Total stock, both at ports and in the pipeline, has drastically reduced by 2.70 lakh tonnes to 12.45 lakh tonnes due to lesser import in last two months, SEA said.

Early this year, the government had hiked the import duty on refined palm oil to protect the interests of local oilseeds farmers and refiners against cheaper imports.

During the November-February period of 2013-14 marketing year, total palm oil imports have fallen to 25.96 lakh tonnes, as against 31.03 lakh tonnes in the same period of previous year, the SEA data showed.

India imports palm oil mainly from Indonesia and Malaysia.