India's vegetable oil imports surge 37% in 2008-09

Import of vegetable oil during oil year 2008-09 (Nov.’08 to Oct.’09) jumped by 37% to 86.6 lakh tons from 63.1 lakh tons for the same period of last year. Import of Vegetable Oils during October 2009 is reported at 667,276 tons compared to 826,848 tons for Oct.’08 i.e. down by 19%, according to Solvent Extractors Association of India (SEAI).

The overall import of vegetable oil including vanaspati has increased by 23.5 lakh tons (37%) during the oil year over the previous year. The main reasons for sharp increased in imports of vegetable oil and its impacts are:

a) Increase in per capita consumption of edible oils with rise in Income.
b) High price elasticity – lower price has boosted the demand and consumption of low priced oils like palmolein.
c) Zero import duty on crude edible oil and very nominal duty on refined palmolein have favoured the import over domestic oils at the expenses of Indian oilseed producers and crushers.
d) Govt. schemes like mid-day meals, subsidized oil and unemployment scheme also boosted the demand.
e) Depreciation of dollor v/s. rupee by 5% has made import more cheaper.
f) Disparity in domestic seed crushing leading to poor capacity utilization and accumulation of stock.
g) The profit margin of oilseed processors have deteriorated severely in new season and many plants are operating at much lower capacity to minimize the losses.

Quarterly Review:
It is surprising that even during peak domestic crushing season (Nov – April) import has not reduced and average import per quarter is nearly 20.0 lakh tons, SEAI said.

Import of Edible Oil:-
The total import of edible oil during November 2008 to October 2009 is reported at 81.83 lakh tons compared to 56.08 lakh tons last year and 47.15 lakh tons in 2006-07.

The import of edible oils is up by 46% compared to previous year. Import of Crude Palm Oil has increased to 51.87 lakh tons from 40.44 lakh tons and RBD Palmolein jumped to 12.40 lakh tons from 7.31 lakh tons in previous year. Import of palm products including CPO and RBD Palmolein has increased to 65.35 lakh tons from 48.09 lakh tons last year i.e. up 36%. Soybean oil import has increased to 9.90 lakh tons from 7.59 lakh tons. Sunflower oil import jumped to 5.90 lakh tons from 27,000 tons . Rapeseed oil import reported at 46,000 tons after a gap of 5 years.

Import of Refined & Crude Oil Ratio:-
Import of refined oils (RBD Palmolein) has sharply increased from just 126,000 tons in 2006-07 to 12.4 lakh tons during 2008-09, thanks to lower duty coupled with reduction in international prices, pushed the import of refined oils. Refined oil represents about 15% of the total edible oil import which was just 3% in 2006-07.

Import of Palm & Soft Oil Ratio:-
In view of nil import duty on CPO and 7.5% on RBD Palmolein (effective duty is only 4 to 5%), palm oil products import during November 2008 to October 2009 has further increased to 65.35 lakh tons compared to 48.09 lakh tons last year. The import of soft oils also increased to 16.48 lakh tons from 7.99 lakh tons in previous year.

Import of Non-edible Oils:
Import of Non-edible oils during November 2008 to October 2009 is reported at 459,599 tons compared to 647,685 tons during the same period last year i.e. down by 29%, due to higher import & domestic refining of CPO, leading to better availability of P.F.A.D. & C.P.S.