Vegetable oils import continued to flood the country, with the shipments hitting a five-month high in June.
According to the Solvent Extractors Association, total imports of vegetable oils were 7.81 lakh tonnes (lt) in June against 5.93 lt during the same period a year ago. For the current oil year that began in November, the imports till June totalled 58.24 lt against 35.67 lt during the same period a year ago, a 79 per cent increase.
This the highest volume brought into the country after January when 8.88 lt were imported.
2 reasons
The association attributed two reasons for the import deluge. One reason was the crash in global prices of vegetable oils on a bearish outlook. The other reason was fears that the Centre may impose Customs duty on the imports. The Union Finance Minister, Mr Pranab Mukherjee, in his Budget for the current fiscal has not proposed any duty on edible oil imports.
Declining trend
Vegetable oils showed a declining trend in June and it has accelerated further this month. The association data showed RBD (refined, bleached and deodarised) palmolein price dropping to $771 a tonne c.i.f from $851 in May. Currently, RBD palmolein is quoting at $665.
Similarly, crude palm oil prices slid to $600 c.i.f. ($715), de-gummed or crude soyabean oil to $780 ($890) and crude sunflower oil to $780 ($892).
Compared with last year, the prices have dropped by nearly half in the global market.
It explains why the imports have flooded the country this year.
In the domestic market, prices for almost all edible oils declined by Rs 4,000 a tonne between May and June. Compared with last year, the prices are down by over Rs 20,000 a tonne.
The association said largescale imports would continue in view of absence of any proposal to impose Customs duty on crude vegetable oils and hike it for refined vegetable oils from the current 7.5 per cent.
Increase in imports
The erratic monsoon and likelihood of lower kharif oilseeds crop would result in further increase in imports in the coming months. Overall, imports could top 80 lt, including 5 lt for non-edible purpose.
A feature of June imports was the rise in crude oils import share to 92 per cent from 80 per cent in May. During the same period last year, crude oils share of the import was 85 per cent.
On the other hand, imports of non-edible oils declined 38 per cent during the November-June period compared with the same period a year ago.
In June, the imports dropped 30 per cent compared with May.
Source : Business Line