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India’s edible oil imports for the current oil year 2020-21 (November-October) are likely to be at 13 million tonnes (mt) or 200,000 tonnes lower than the previous year, according to the Solvent Extractors Association of India (SEAI), the apex trade body.
Speaking on ‘Palm oil market in India: Challenges and opportunity’ at the ‘World Palm Virtual Expo and Conference’ on Wednesday, BV Mehta, Executive Director, SEAI, said: “We do not foresee any improvement in demand during the current oil year (November-October) 2020-21.”
An Atmanirbharta mission for oil palm
Domestic consumption affected
Stating that Indian edible oil demand continues to be subdued due to Covid-19, Mehta said the high edible oil prices also affected domestic consumption. Indian consumers are price-sensitive as nearly 50 per cent of the population is middle class or lower middle class. Also, the local production of edible oils has increased by 1 mt in the last one year.
National edible oil mission – a long-pending demand of the industry
“We would not be surprised to see a lower number during the oil year 2020-21 at 13 mt or about 200,000 tonnes lesser than 13 mt,” Mehta said. Indian edible oil imports stood at 13.17 mt during the oil year 2019-20.
Further, Mehta said the overall oilseeds planting is about 19.2 million hectares as on September 6, less by 3 per cent compared to last year. “In the beginning of the season, we were expecting that the acreage will go up. But now practically the acreage will be the same as that of last year,” he said.
It’s advantage, Malaysia
On the Government’s decision to allow RBD palmolein freely till December 31, Mehta said 150,000-200,000 tonnes per month of refined oil is likely to arrive in India till December-end.
On the Government’s likely move to further reduce the import duty on edible oils, Mehta said: “I am not saying that it will reduce but may reduce. There are chances. The Government may reduce the duty, looking at the high prices of edible oil.”
High price is the main reason for the Government to think about the reduction of import duty. “But we are still wondering because we will be harvesting the new crops in the next two-three weeks. That may affect farmers’ sentiments. But at the same time the Government has to balance the interests between consumers and farmers. For a short time, the Government may reduce the duty,” he said.
Commenting on the demand and import outlook for palm oil from Malaysia, Mehta said Malaysia has advantage over Indonesia. Earlier Indonesia’s share in the total import was two-third and Malaysia’s share was one-third. Stating that things were changing now, Mehta said Indonesia imposes heavy export duty and levy. Such moves discouraged Indian importers to buy from Indonesia, and they are moving towards Malaysia, he added.
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