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Veg oil imports set to rise 3% in 2019-19 season after dropping last year

Next year, domestic production is likely to increase on hope of good rabi oilseeds crop, limiting the need for imports

Rajesh Bhayani  |  Mumbai 

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“The government imposed five per cent safeguard duty on RBD Palmolein/Palm Oil of Malaysian origin on September 4, which widened the difference between crude and refined palm oil duty to 10 per cent.

India’s imports are set to rise by three per cent in the 2018-19 season after dropping the previous year (November 2017 to October 2018), according to data compiled by the Solvent Extractors Association of India. In September 19, however, imports of both, edible and non-edible oils fell by as much as 13 per cent to 1.3 million tonnes.

During the past several years, there was a decline in imports only in the last year. In the first 11 months of the current oil year ending September, the inbound shipments rose three per cent to 14.17 million tonnes. The full year (November-October) is expected to end with a three per cent rise in imports, with the October figure expected to touch 1.2-1.3 million tonnes.

Of the total 14.17 million tonnes vegetable oil imported in the first 11 months, shipments amounted to 13.6 million tonnes. Indians currently consumes about 23 million tonnes of edible oil, and every year, there is a spike in demand by about one million tonnes. Some 1.8 million tonnes of stock are lying at the ports or are in the pipeline as of now, though this is some 240,000 tonnes lower than a month ago.

Veg oil imports set to rise 3% in 2019-19 season after dropping last year

In 2018-19 domestic production of oil extracted from seeds is estimated at seven million tonnes due to lower Kharif crop.

B V Mehta, Executive Director, SEA, said, “Domestic production of oil seeds in rabi season is expected to be higher following improved surface and ground water reserves. This will help increase domestic production of ” He believes the additional demand arising out of an increase in population is expected to be met by higher domestic production and that imports can be contained at the current level or may rise by about 2-3 per cent at the most.

According to an SEA note, “The government imposed five per cent safeguard duty on RBD Palmolein/Palm Oil of Malaysian origin on September 4, which widened the difference between crude and refined palm oil duty to 10 per cent."

The note alos says that traders fear India may curtail palm oil imports from Malaysia following that country's hostile attitude towards India at the United Nations. As a result, many importers and refiners may source their requirements from Indonesia instead of Malaysia in November and December.

In September, Malaysia had used the United Nations as a platform to accuse India of invading and occupying Jammu & Kashmir.

First Published: Tue, October 15 2019. 17:05 IST
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