Vegetable oil imports up by 10%, say oil extractors.

Import of vegetable oils in the seven months to May 2016 increased by 10% from the year-ago period, according to data compiled by the Solvent Extractors' Association of India (SEA).

Between November 2015 and May this year—the first seven months of the current oil year—the country imported 85.94 lakh tonnes of the commodity compared with 78.34 lakh tonnes in the year-ago period.

In May this year, vegetable oil import touched 10.25 lakh tonnes compared with 13.72 lakh tonnes a year ago. The import consisted of 10.04 lakh tonnes of edible oils and 20,193 tonnes of non-edible oils, whose volume was down by a quarter due to reduced demand in summer.

According to SEA, import of RBD palmolein during the first seven months of the current oil year jumped 107% to 15.87 lakh tonnes from the year-ago period, replacing import of crude palm oil (CPO). It is expected to increase in the coming months. The increase in import of RBD palmolein is hurting the domestic refining industry, executives said.

This situation is mainly because the landed cost of RBD olein (finished product) is less than that of CPO, and it has led to under-utilisation of capacity in the domestic refining industry.

At present, the tax on export of CPO from Indonesia/Malaysia is higher by 5% as compared with refined palm oil/olein. This differential will keep increasing with an increase in prices of palm oil in the origin countries. Therefore, duty differential in India has to be made variable to be in line with the differential duty prevailing in Malaysia/Indonesia.

The stock of edible oils as on June 1 at various ports is estimated to be 865,000 tonnes (CPO 270,000 tonnes, RBD palmolein 250,000 tonnes, degummed soybean oil 210,000 tonnes, crude sunflower oil 110,000 tonnes and 25,000 tonnes of rapeseed (Canola) Oil), and about 1,465,000 tonnes in pipelines.

The stock at ports and in pipelines decreased to 23.3 lakh tonnes from 24.4 lakh tonnes in May 2016. India's monthly requirement is about 16.5 lakh tonnes, against which it currently holds over 23.3 lakh tonnes which can last for 42 days. The overall stock as on June 1 was down by 1.1 lakh tonnes from May 1, 2015.

Source : economictimes.indiatimes.com