PT Astra Agro Lestari Tbk: Indian palm oil imports up 15% in 2020-21, return to pre-pandemic market shares

India’s palm oil purchases increased 15% in MY 2020-21 (November-October), although total vegetable oil imports remained unchanged, the agency said National Trade Union Solvent Extractors’ Association of India (SEA) in a November 16 press release.

The new data showed that palm oil has regained market share in India’s vegetable oil landscape after declining to 55% of total imports in 2019-2020 – from 60% to 65% – while A nationwide lockdown triggered by a pandemic has cracked down on dining out. activities as well as hotel businesses across the country.

In 2020-2021, the share of palm oil imports fell to 63% while imports of sweet oil fell to a five-year low of 4.81 million tonnes from 5.96 million tonnes in 2019-20, according to SEA data.

“Reopening of HoReCa [Hotels, Restaurants and Catering] coupled with a massive reduction in import duties and allowing the import of RBD palm olein helped India’s palm oil imports increase during MA 2020/21, ”he told Platts Anilkumar Bagani, Research Manager at Sunvin Group, a vegetable oil brokerage company based in Mumbai.

Imports of palm oil by the world’s largest buyer of vegetable oils reached 8.32 million tonnes in MY 2020-21, up from 7.22 million tonnes in 2019-20, while total vegetable oil imports remained “more or less stable” at 13.53 million tonnes – the lowest in the past six years, according to the SEA.

Palm oil is the preferred oil in the HoReCa industry in India because it is comparatively cheaper than other sweet oils such as soybean and sunflower, has a longer shelf life and is stable at high temperatures. used in frying. Meanwhile, peanut, soybean and mustard oils are popular household cooking oils in the country.

“National HORECA requirements are likely to have increased demand for palms through improved relative value and competitiveness against sweet oils and coverage of term subscriptions against supply expectations.” , according to Marcello Cultrera, director of institutional sales and merchandise reseller at Kaula Lumpur. based Phillip Futures.

Import bill hits record high
As India’s import volumes stagnated, the cost of imports hit a record 1.17 trillion rupees ($ 15.7 billion), according to SEA data on November 16, when supply constraints and a recovery in commodity markets have pushed international vegetable oil prices to record highs in 2021.

Crude palm oil or CPO prices in Indian ports crossed the $ 1,000 / metric tonne mark in January, SEA data showed. Meanwhile, in Malaysia, palm oil futures hit a record high in May and then a new high in October as production failed to rise during the peak season due to a persistent shortage of oil. labor at the second largest producer and exporter of palm oil.

S&P Global Platts valued the cost of the CPO CFR West Coast India at $ 1,382.5 / mt on November 15, up 58% from the previous year.

To reduce domestic prices for edible oil, New Delhi has reduced import taxes on edible oils four times since June 2021 and eased restrictions on the import of refined palm oil products such than the refined bleached and deodorized palm olein, known as RBD palm olein.

On October 10, India also introduced stock limits for edible oils to regulate stocks that wholesalers and retailers can store in order to further suppress high domestic prices and avoid hoarding.

However, the ruling currently rules out exporters and importers, and trade sources expect India’s palm oil imports to be between 600,000 and 800,000 tonnes in the coming months.

Source: SPGlobal

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