Refined oil imports rise on inverse duty structure

Surge 58% in first quarter of oil year

Refined oil imports jumped 58 per cent in the first quarter of the oil year (November – October) due to inverse duty structure levied by exporting countries including Malaysia and Indonesia. India meets around 55 per cent of around 16.5 million tonnes of its annual consumption through imports.

Import of refined oil was reported at 580,333 tonnes in the first quarter of the current oil year as compared to 367,054 tonnes in the corresponding period last year.

Import of refined, bleached and diodized (RBD) palmolein increased to 208,000 tonnes in January 2014 compared to 164,000 tonnes in December 2013, while crude palm oil (CPO) import has fallen to 340,000 tonnes from 692,000 tonnes in previous month due to RBD palmolein (refined oil) working out to cheaper by $15-20 per tonne than CPO, the raw material.
 

Before the inverted export duty imposed by Indonesia in October 2011, RBD palmolein used to be sold at least $60-80 per tonne higher than CPO which was giving some comfort level to Indian refiners to import and process CPO. In view of increased import of RBD palmolein in last two years, capacity utilization of domestic refiners reduced from 55-60 per cent to 30 -35 per cent and many units closed down or an verge of closure due to continuous disparity in processing of CPO, said B V Mehta, executive director of the Solvent Extractors’ Association.

Meanwhile, vegetable oil imports declined 22 per cent to 905,814 tonnes in January this year as compared to 1,157,130 tonnes in the same month previous year.