Palm oil imports plunge 28% on higher stock, weak demand.

India's palm oil imports fell by 27.54 percent to 6,57,454 tonnes in May, in view of higher stock availability and sluggish summer demand, industry body Solvent Extractors Association (SEA) said today.

India, the world's leading vegetable oil buyer, had imported 9,07,347 tonnes of palm oil in May last year.

Palm oil make up more than 65 percent of the country's total vegetable oil imports. In last few months, there has been a sharp rise in the import of cheap RBD palmolein.

But last month, overseas purchase including RBD palmolein showed a decline "due to highest stock at port and pipeline and reduced demand due to summer," SEA said in a statement.

SEA, which has been expressing concerns over rising cheap imports of RBD palmolien, said: "Due to this situation, domestic refining industry is facing severe crisis of under utilisation of capacity and is on the verge of closure." Refined palm oil is cheaper to import because the export tax imposed on it by Indonesia/Malaysia is lower than CPO.

"Therefore, the duty differential in India has to be made variable to be in line with the differential duty prevailing in Malaysia and Indonesia and justify to increase in duty difference between crude and refined vegetable oils from 7.5 percent to 15 percent," the SEA said.

Among palm oil products, import of RBD palmolein fell by 5 percent to 2,61,159 tonnes in May from 2,75,150 tonnes in the year-ago period.

The shipments of CPO declined by 37.23 percent to 3,91,796 tonnes from 6,24,201 tonnes while import of crude palm kernel oil (CPKO) dropped by 44 percent to 4,499 tonnes from 7,996 tonnes in the said period.

Among soft oils, import of soyabean oil fell to 1,78,064 from 2,89,266 tonnes last year while sunflower oil and rapeseed oil shipments stood at 1,50,449 tonnes and 18,718 tonnes, respectively.

Country's total vegetable oil imports fell 25 percent to 10.24 lakh tonnes from 13.71 lakh tonnes.

Total stock at ports and in pipeline declined to 23.30 lakh tonnes while the country's monthly requirement is about 16.5 lakh tonnes, SEA said.

India imports palm oil mainly from Indonesia and Malaysia and a small quantity of crude soft oils, including soyabean oil from Latin America. Sunflower oil is imported from Ukraine and Russia.

Source : moneycontrol.com