The Palm oil Import bill has been witnessing a steady growth in recent past, thanks to the increase in the prices of palm oil in the international market and India’s dependence on palm oil to meet the requirements of edible oils in the country.
Nearly two-third of Indian edible oil requirements are being met by imports, and palm oil leads in these imports. A wide customer base has been boosting palm oil demand over the years.
According to the Solvent Extractors’ Association (SEA) of India, palm oil constitutes a major share in the total edible oil imports in the country. During the oil year 2020-21(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 per cent. Of the total edible oil imports of 13.13 million tonnes (mt) during the oil year 2020-21 (November to October), edible palm oil imports stood at 8.18 mt.
Considering the existing crushing capacity for edible oils in the country, the share of crude palm oil (CPO) in the total edible oils import was also quite high. In fact, the CPO import went up from 6.34 mt in 2016-17 to 7.49 mt in 2020-21.
India’s CPO imports rose to 6.46 mt, 6.53 mt, and 6.67 mt during 2017-18, 2018-19 and 2019-20, respectively.
Import of RBD palmolein remained below one mt mark for 2020-21 and 2019-20. This was because the Government had placed RBD palmolein under the restricted list category on January 8, 2020 and allowed import subject to licence. As a result of this, import of RBD palmolein came down to 0.42 mt in 2019-20 as against 2.73 mt in 2018-19. Prior to 2019-20, the country had imported more than 2 mt of RBD palmolein.
However, import of RBD palmolein started recovering in 2020-21 recording an import of 0.69 mt. The reason for this was the lifting of the restriction for import of refined palm oil and palmolein from June 30 up to December 31.
Recent data by SEA of India showed that India imported edible oils valued ₹1.17 lakh crore during the oil year 2020-21, increasing 63 per cent over the last oil year. According to Atul Chaturvedi, President of SEA of India, the import of edible oils stood at 13.2 mt valued about ₹71,600 crore in 2019-20. Though India imported a similar quantity of edible oil in 2020-21, the import bill jumped by 63 per cent and touched an alarming level of ₹1.17 lakh crore. He attributed it to the increase in international prices of edible oils.
The share of edible palm oil in the total edible oil import bill was at ₹69,174.81 crore.
This palm oil import bill was more than the total edible oil import bill (₹62,933 crore) of 2018-19 and 2017-18 (₹66,942 crore). However, it was slightly below the total edible oil import bill (₹71,625 crore) of 2019-20.
How did palm oil imports fare in 2020-21?
A look at the palm oil imports and the import price movements during the four quarters oil year 2020-21 shows that the first and the fourth quarters imported more than 2 mt of CPO, and the average CIF import price was at the lowest and highest during these quarters.
According to the data available with the SEA of India, average CIF import price of CPO hovered around $1369 a tonne (October), and at $873 a tonne (November 2020).
In all, the CIF price for CPO stood at around ₹63,009.19 crore for the entire oil year of 2020-21.
Consequent to the lifting of the restriction for import of refined palm oil and RBD palmolein from June 30 up to December 31, the average CIF import price of RBD palmolein, which was $896 a tonne in November 2020, moved up to $1349 a tonne in October. The CIF price for RBD palmolein ₹6165.62 crore for the entire oil year of 2020-21.
With this, the total import bill of CPO and RBD palmolein reached a level of ₹69,174.81 crore during 2020-21.