Agri Business

Weak rupee pulls down veg oil imports

Our Bureau Mumbai | Updated on July 13, 2012 Published on July 13, 2012




Vegetable (edible and non-edible) oil imports were down nine per cent at 7.83 lakh tonnes (lt) in June against 8.62 lt in the same period last year. In fact, oil imports have been decreasing since start of this fiscal as rupee depreciated against dollar. The dollar has fallen to 55.94 in June against 44.18 last year.

Import of edible oil were down seven per cent at 7.69 lt (8.29 lt) in June while non-edible oil imports dipped 60 per cent to 13,430 tonnes against 33,591 tonnes in the same period last year.

India imports about 50 per cent of its vegetable oil requirement. The country imports palm oil from Indonesia and Malaysia, while soya oil is shipped from Brazil and Argentina.

However, in the first eight months of the current oil year (that runs from November to October) vegetable oil imports were up 25 per cent at 64 lt (51 lt), according to the Solvent Extractors’ Association of India (SEA).

Between November and June, import of RBD (refined, bleached and dried) palmolein has nearly doubled to 12 lt. The share of refined palmolein jumped to 19 per cent while that of crude oil decreased 81 per cent largely due to duty structure followed in Indonesia.

The Indonesian government doubled the export duty on crude palmolein to 18 per cent compared to refined oil to encourage local refining. The price gap between CPO (at $1001 tonnes) and RBD palmolein (at $973 tonnes) in June reduced to $28 compared to $73 a year back.

SOFT OIL JUMP

Sunflower oil imports were down 30 per cent at 87,859 tonnes in June compared to 125,200 tonnes in May. Soybean oil shipments more than doubled to 139,794 tonnes compared to 62,500 tonnes in May.

In first eight months of this oil year, the import of soft oils increased sharply to

1,578,829 tonnes compared to 988,211 tonnes last year, as many refiners switch over to refining of soft oils from crude palm oil, said SEA.

Sunflower oil was a major contributor in meeting soft oil demand. Sunflower oil, which is most preferred in India, is available at premium of just $9 a tonne over soya oil. For the first time, India started importing canola oil this year. It shipped in about 90,758 tonnes in last five months. This was mainly due to lesser local crushing of rapeseed, SEA said.

Decision on duty hike deferred

The Cabinet ministers, who met in New Delhi on Thursday, deferred a decision on revising the import duty due to time constraint, according to industry sources. Vegetable oil importers have urged the Government to mark up the base rate for calculating import duty to discourage cheaper imports. Indonesia had cut its exports duty on refined varieties and increased duty on crude palm oil. India had retained the base import price unchanged since 2006. In India, refined edible oil attracts an import duty of 7.5 per cent, while crude can be imported duty free.

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Published on July 13, 2012
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