India’s imports of palm oils declined by 29.15 per cent to 5.44 lakh tonnes in December 2021, but the rise in shipments of RBD palmolein is threatening the survival of domestic refineries, Solvent Extractors Association (SEA) said on Wednesday.
India, the world’s leading vegetable oil buyer, had imported 7,68,392 tonnes of palm oils in December 2020. In December last year, palm oil imports fell to 5,44,343 tonnes.
The country’s total vegetable oil imports declined by 10 per cent to 12.26 lakh tonnes in December 2021 compared to 13.56 lakh tonnes in the year-ago period.
The share of palm oil is more than 60 per cent of the country’s total vegetable oil imports.
According to SEA, there has been a rise in imports of RBD palmolein that will affect domestic refiners.
There is a huge disparity in prices of RBD palmolein and Crude Palm Oil (CPO) after reduction in import duty on the former.
"The reduction in effective import duty on (refined) palmolein from 19.25 per cent to 13.75 per cent without simultaneous reduction in import duty on CPO has the potential to increase the import of refined palmolein at the cost of CPO, which is the raw material for domestic refiners,” it said.
Since RBD palmolein is freely allowed at lower duty till March 2022, SEA said about 10 to 12 lakh tonnes of RBD palmolein imports are expected during the January-March quarter, replacing much of CPO as there is a disparity to the tune of Rs 6,000-8,000 per tonne in processing costs.
"It indicates that Indian refiners have a heavy disparity and will compel them to close down the palm oil refineries,” it added.
Among palm oil products, import of CPO declined 29.59 per cent to 5.28 lakh tonnes in December 2021 from 7.48 lakh tonne in the year-ago period, as per SEA data.
The shipment of Crude Palm Kernel Oil (CPKO) also fell to 13,800 tonnes from 19,486 tonnes in the same period a year ago.
However, the imports of RBD palmolein rose to 24,000 tonnes in December 2021 from 900 tonnes in the year-ago period.
Among soft oils, the import of soyabean oil increased 21.57 per cent to 3.92 lakh tonnes in December last year as against 3.22 lakh tonnes in December 2020.
Similarly, the shipment of sunflower oil rose 10 per cent to 2.58 lakh tonnes in December 2021 from 2.34 lakh tonnes in the year-ago period.
According to SEA, edible oils stock as of January 1 was estimated at 5.80 lakh tonnes and about 11.40 lakh tonnes was in the pipeline.
India imports palm oil mainly from Indonesia and Malaysia, and a small quantity of crude soft oil, including soyabean oil, from Argentina. Sunflower oil is imported from Ukraine and Russia.
Source:moneycontrol.com