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Depreciating rupee coupled with an import duty hike has slowed down vegetable oil imports to the country in June.
Data compiled by the Solvent Extractors' Association of India (SEA) show vegetable oil imports for June 2018 stood at 1,042,003 tonnes compared with 1,344,868 tonnes in the same month last year, down 23 per cent on year-on-year basis.
The overall import of vegetable oils during November 2017 to June 2018 was 9,646,538 tonnes (9,867,572 tonnes), down 2.2 per cent, the SEA said.
The current duty structure coupled with rupee depreciation and credit crunch in the market has slowed down the import, it said. The rupee depreciated from Rs 64.45 in June 2017 to Rs 67.79 in June 2018. This is in contrast to the international market prices of edible oils, which fell in the range of 2-10 per cent due to increased supply.
"But rupee depreciation by nearly 5 per cent in one year, nullified the advantage of price reduction," said BV Mehta, executive director, SEA in a statement.
Interestingly, in May, for the first time, imports of soft oils (soya, sunflower & rape) were higher than palm oils. Soft oils share in total veg oil imports stood at 60 per cent while palm oil was just 40 per cent.
Also, soft oils import and sunflower oil import are the highest in any single month since India started importing edible oils in 1994, the SEA noted.
On March 1, 2018, the Centre had increased import duty on crude palm oil , RBD Palmolein and RBD Palm Oil without making changes in import duty on sunflower oil, rapeseed oil and soybean oil.
During November 2017-June 2018, overall palm oil import decreased to 5,557,723 tonnes from 5,925,563 tonnes, while soft oils import increased to 3,843,053 tonnes from 3,690,395 tonnes during the same period of last year. Also, there was a parcel of 3,000 tonnes of cottonseed oil from US arrived during April 2018.
Meanwhile, SEA noted that import of non-edible oils during November 2017 to June 2018 is reported at 245,762 tonnes, down by 2 per cent from 251,614 tonnes during the same period last year.
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