India’s palm oil imports declined by 29.15 per cent to 5,53,084 tonnes during January this year, but there was a sharp rise in shipments of RBD palmolein affecting domestic refineries, industry body Solvent Extractors Association (SEA) said. India, the world’s leading vegetable oil buyer, imported 7,80,741 tonnes of palm oils in January 2021.
The country’s total vegetable oil imports rose by 16 per cent to 12.70 lakh tonnes in January 2022, compared to 10.96 lakh tonnes in the year-ago period. The share of palm oil is more than 60 per cent of the country’s total vegetable oil imports.
According to the SEA, the reduction in duty difference between RBD palmolein and Crude Palm Oil (CPO) has led to an increase in import of the former at the cost of the latter. CPO is a raw material for domestic refineries. Any reduction in import of CPO impacts the refineries.
The government had from December 2021, reduced the effective import duty on refined palm oil, from 19.25 per cent to 13.75 per cent, without simultaneous reduction in import duty on CPO.
SEA said it expects import of a large quantity of RBD Palmolein to the tune of 8-9 lakh tonne during January-March quarter, replacing much of CPO as there is a wide disparity of about Rs 6,000/8,000 per tons of processing.
“Indian refiners have a heavy disparity and will compel them to close down the palm oil refinery if no corrective steps are taken by the government to increase duty difference at least to earlier level,” it said.
Among palm oil products, import of CPO declined to 4.07 lakh tonnes in January this year, from 7.67 lakh tonnes in the year-ago period, as per the SEA data.
However, the import of RBD palmolein rose sharply to 1.34 lakh tonnes from 2,701 tonnes, while that of crude palm kernel oil (CPKO) increased to 11,209 tonnes from 10,204 tonnes in the said period. India imports palm oil mainly from Indonesia and Malaysia, and a small quantity of crude soft oil, including soyabean oil from Argentina. Sunflower oil is imported from Ukraine and Russia.