India’s import of vegetable oils during November 2018 is reported at 1,133,893 (approximately 1.13 million) tonnes compared to 1,248,810 (1.24 million) tonnes in November, 2017, a decline of 9 per cent, according to data compiled by the Solvent Extractors’ Association of India (SEA).
India had signed a comprehensive Economic Cooperation Agreement (MICECA) with Malaysia on 27 October, 2010. As per provisions of MICECA Agreement between India and Malaysia for MFN (Most Favoured Nation) tariff, import duty on CPO (Crude Palm Oil) and refined Palm Oil and others will gradually reduce from base rate for the period between 1 January, 2012 and 31 December, 2019. Accordingly the upper limit of the tariff was also fixed.
Currently, under MICECA, India has imposed highest import duty on CPO at 44 per cent and RPO 54 per cent with effect from 14th June, 2018. According to MICECA, the CPO and RPO (Refined Palm Oil) upper limit of duty is supposed to be revised downward to a maximum of 40 per cent to 45 per cent respectively latest by December 31, 2018.
In anticipation of likely reduction of import duty by India on palm oil by December 31,2018, shipments of crude oil imports have slowed down for the time being. They are likely to pick up from January 2019 onwards.
Further, palm oil prices are at a historical low of last 10 years and the spread between palm and soft oil has increased, which has made palm oil more attractive to import by India.