Amid persistently cooking oil prices since more than a year, the central government has reduced the import duty on crude and refined palm oil, soybean oil and sunflower oil between 16.5 % to 19.25% with effect from October 14 upto March 31, 2022. Meanwhile,
The impact of the duty reduction on crude palm oil is about Rs.14,000/- while on crude soyabean oil and crude sunflower seed oil is about Rs.20,000/- per tonne. "The total benefit of duty reduction may not fully accrue to the Indian consumer. In fact, today after the announcement of the duty reduction, the Malaysian Market has gone up by about RM 150 to 170 per tonne. Also, the rumours in the market in the last few days have already discounted the domestic price to some extent. The price of refined oil may further reduce by Rs 6 to 8 per kg," said Atul Chaturvedi, president, Solvent Extractors' Association (SEA).
The immediate trigger for this drastic duty reduction is largely on account of high price edible oil and onset of festive season and high food inflation. "However the timing of reduction of import duty is a cause of concern as farmers are now harvesting record kharif soya and groundnut crop and reduction in import duty may affect the farmers’ realisation for their produce," said Chaturvedi.
According to SEA, import of vegetable oils during September 2021 is reported at 1,762,338 tons compared to 1,061,944 tons in September, 2020, consisting 1,698,730 tons of edible oils and 63,608 tons of non-edible oils i.e. up by 66%. The overall import of vegetable oils during November 2020 to September 2021 ( 11 months) is reported at 12,470,784 tons compared to 12,257,837 tons, up by 2% compared to last year.
Record Import in September 2021:
According to SEA, Import of edible oils during September, 2021 has set a new record of shipment of 16.98 lakh tons in a single month. Earlier in October ,2015 India had imported 16.51 lakh tons of edible oils. Palm Oil imports recorded in the month of September 2021 at 12.62 lakh tons is the highest in any single month since India started importing Palm Oil in 1996.
October 2021 stock at the highest level:
The stock of edible oils as on October 1, 2021 at various ports has been estimated at 845,000 tons and pipeline stock at 1,160,000 tons. Thus, the total stock is of 2,005,000 tons, mainly due to heavy import during September 2021. "The stock has increased by 255,000 tons to 20.05 lakh tons as on October 1, 2021 from 17.50 lakh tons as on September 1, 2021 and 16.02 lakh tons in October 2020," said SEA.
Import of Palm Oil Products up due to duty advantage:
During the 11 months from November 2020 to September 2021, palm oil import has increased to 7,627,218 tons compared to 6,440,947 tons during same period of last year due to lower duty advantage compared to soft oils. Soft Oils import decreased to 4,458,029 tons compared to 5,509,554 tons due to high prices of soybean and sunflower oils in international market. Shipment of Crude Rapeseed Oil restarted from August 2021 due to high price of domestic rapeseed oil (mustard oil). Import of about 12,000 tons and 20,215 tons of rapeseed oil is reported during August and September 2021 respectively and expected increase during next 2 to 3 months to fill the shortage of mustard oil. The overall palm oil share increased to 63% compared to 54% in same period of previous year.
Source:economictimes.com