Substantial reduction in import cost of imported edible oils year-on-year

Bhoo Bazar : Dilip Shah

The country has an annual demand of around 2.4 million tonnes of edible oils, of which 60 percent is met through imports.

The edible oil market and industry in the country has recently witnessed a rapid reversal of equations. In the initial months of the current year 2023, the prices of imported edible oils, especially imported edible oils, rose to new record highs, followed by a rapid fall from highs. Recently, due to cyclones and rains in Gujarat, Saurashtra and Kutch region, the operations at the ports were affected and the income and movement of goods were also affected in the markets. Edible oil prices had increased. However, market sources said that there has been a retreat in the market price due to the usual trading of goods. Recently, the government also reduced the import duty on refined soybean oil and refined sunflower oil. The government has directed to reduce such import duty which was earlier 17.50 percent to 12.50 percent. Although the import duty on crude palm oil, crude soya oil and crude sunflower oil imported into the country is significantly lower than this, according to market informants, despite the reduction in the import duty on refined edible oils, the import of crude edible oils is likely to remain high as compared to the import of refined oils in the country. is In the period of November 2022 to April 2023, the import of palm oil in the country has increased to about 49 lakh tonnes, which was about 32 lakh tonnes in this period of 2021-22. In this period, the share of palm oil in the total import of edible oils has increased to 60 to 61 percent, which was recorded from 48 to 49 percent in this period last year.

However, in the last two months, there has been a significant increase in the import of soya oil and sunflower oil in the country, market informants said. According to market sources, the crude palm oil CPO import price in June last year was recorded at USD 1,555 to USD 1,560 per tonne at the Mumbai port, which has dropped significantly to USD 860 in June this year. In this way, during this period, the import of raw (crude) soybean oil has fallen from 1625 to 1690 dollars to 970 dollars per ton at Mumbai port. While such import cost of sunflower oil has gone down from 1940 to 1945 dollars to 860 dollars per ton. In September last year, the government reduced the import duty on crude edible oils and after that the government also decided to increase the implementation of such concessional import duty. The total annual demand of various edible oils in India is about 240 lakh tonnes and 60 percent of this total demand is met through imported edible oils. About 74 to 75 percent of the 1.4 million tonnes of edible oil imported annually in the country is crude edible oil, market insiders said. To reduce dependence on imported edible oils in the country, the government has shown initiative to increase palm cultivation and production at home. Plans have been made to increase palm cultivation and production in South India. However, market players are keeping an eye on how successful this plan is going forward.

Meanwhile, domestic singe oil and cottonseed oil prices have recently seen a dip after rising behind Saurashtra. The price of Saurashtra Cotton Washed which was rising above Rs.900 has again come down to within Rs.900. Market players are showing the possibility of increasing the demand for planting if the rains in Singdana continue as usual. Total palm oil exports from Malaysia fell by around 16-17 percent in the first 20 days of June. However, in the first 15 days of June in Malaysia, palm oil production has also seen a decline of 4 to 5 percent. World market experts have also been showing the fear of affecting the production of palm and soybean due to dry weather and adverse weather at the global level. There were also indications recently that Maharashtra has overtaken Madhya Pradesh in domestic soybean production. Soybean prices are lower in Maharashtra than in Madhya Pradesh.