How palm oil swells India’s edible oil import bill

The palm oil import bill has grown steadily in recent times, thanks to rising palm oil prices in the international market and India’s reliance on palm oil to meet the country’s edible oil needs.

Almost two-thirds of India’s edible oil needs are met by imports, and palm oil leads the way. A large customer base has driven demand for palm oil over the years.

According to India’s Solvent Extractors’ Association (SEA), palm oil constitutes a significant share of total edible oil imports into the country. In the 2020-21 oil year (November-October), the share of imported edible palm oil (which includes RBD palmolein and crude palm oil) in the total edible oil import basket was 62.27%. Of the total palm oil imports of 13.13 million tonnes (mt) in the oil year 2020-21 (November to October), edible palm oil imports amounted to 8.18 mt.

Read more: USDA predicts an 8.6 million tonne palm oil import from India in 2021-2022

Considering the existing grinding capacity of edible oils in the country, the share of crude palm oil (CPO) in total edible oil imports was also quite high. In fact, the import of CPO has increased from 6.34 mt in 2016-17 to 7.49 mt in 2020-21.

Indian imports of CPO reached 6.46 t, 6.53 t and 6.67 t in 2017-2018, 2018-2019 and 2019-2020, respectively.

RBD palmolein imports remained below the 1 mt mark for 2020-21 and 2019-2020. Indeed, the government had placed RBD palmolein in the category of the restricted list on January 8, 2020 and authorized the importation subject to license. As a result, RBD palmolein imports fell to 0.42 mt in 2019-20 from 2.73 mt in 2018-19. Before 2019-2020, the country had imported more than 2 tonnes of RBD palmolein.

However, RBD palmolein imports started to recover in 2020-21, registering an import of 0.69 mt. The reason was the lifting of the restriction on imports of refined palm oil and palmolein from June 30 to December 31.

Recent data from India’s SEA showed that India imported edible oils worth 1.17 lakh crore in the oil year 2020-21, increasing by 63% during the last oil year. According to Atul Chaturvedi, Chairman of SEA India, edible oil imports amounted to 13.2 million tonnes with a value of around 71,600 crore in 2019-2020. Although India imported a similar amount of edible oil in 2020-2021, the import bill jumped 63% to an alarming 1.17 lakh crore. He attributed it to the increase in the international prices of edible oils.

The share of edible palm oil in the total bill for edible oil imports was 69,174.81 crore.

This palm oil import bill was higher than the total edible oil import bill (₹ 62,933 crore) from 2018-19 and 2017-18 (₹ 66,942 crore). However, it was slightly lower than the total edible oil import bill (₹ 71,625 crore) from 2019-2020.

How did palm oil imports fare in 2020-2021?

A review of palm oil imports and import price movements during the four quarters of the 2020-21 oil year shows that the first and fourth quarters imported more than 2 million tonnes of CPO, and that the average CIF import price was at its lowest and highest during these quarters.

According to data available from India’s SEA, the average CPO CIF import price hovered around $ 1,369 per tonne (October) and $ 873 per tonne (November 2020).

In total, the CPO’s CIF price was around 63,009.19 crore for the entire 2020-21 oil year.

Following the lifting of the restriction on the import of refined palm oil and RBD palmolein from June 30 to December 31, the average CIF import price of RBD palmolein, which was $ 896 per tonne in November 2020, rose to $ 1,349 per tonne in October. . The CIF price of RBD palmolein 6165.62 crore for the whole oil year 2020-21.

With this, the total import bill of CPO and RBD palmolein reached a level of 69,174.81 crore in 2020-21.

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