Vegetable oil imports in December rose to the second highest level in two decades at 10.67 lakh tonnes on the back of fall in prices and growing demand.
The previous high of 11.57 lakh tonnes was recorded in January last year, according to data released by the Solvent Extractors’ Association.
Imports increased 12 per cent in December compared with 9,08,587 tonnes during the same period a year ago.
In the last two months, imports of sunflower oil surged substantially as the oil has turned cheaper compared to soyabean oil.
Besides, the price difference between refined palmolein and crude palm oil has dropped to less than $10 a tonne, making refined palmolein more attractive compared to the crude form.
Traders enhanced palm oil imports on expectation that the Government may further increase import duty in the coming months. Refined crude palm oil prices were down three per cent in December at $854 (about Rs 52,786) a tonne against $880 in November while that of crude palm oil dipped to $864 ($881).
Crude soyabean and sunflower oil were down at $967 ($1,003) and $960 ($995), respectively.
Rupee appreciated to 61.81 against the dollar in December compared with 62.52 in November.
In a move to protect the domestic processing industry and farmers, the Government last week increased import duty on refined edible oil to 10 per cent from 7.5 per cent.
The decision to enhance duty on refined edible oil was taken to maintain a 7.5 per cent import duty difference between refined and crude edible oils. The import duty on crude edible oil is currently 2.5 per cent.
Reacting to the duty hike, Dinesh Shahra, Managing Director, Ruchi Soya Industries, said the Government’s decision to hike duty is too little and too late.
It may not help to reduce the suffering of refining industry.
Indonesia, one of the largest exporters to India, levies 12 per cent export duty on crude oils and five per cent on refined oils.
India imports 90 per cent of its crude palm oil from Indonesia.
“Ideally, the import duty on refined oils in India should be 14.5 per cent more than that of crude oils,” he said.
In the last two months, imports of refined oil are up 74 per cent at 3,72,102 tonnes against 2,13,994 tonnes in the same period a year ago.
Crude oil imports grew at a slower pact of 19 per cent to 16,07,559 tonnes against 13,45,729 tonnes in the same period last year.
Non-edible oil imports in December fell 40 per cent to 15,159 tonnes against 25,098 tonnes in the same period last year.
Import in last two months dipped 34 per cent to 32,357 tonnes (49,235 tonnes) due to sharp fall in demand.
The demand for palm fatty acid distillate and crude palm kernel oil, the largest imported non-edible oils, are used in soap industries, chemical industries, besides confectionery and bakery products, biscuits and as animal feed.
suresh.i@thehindu.co.in