Import of crude edible oil is at a new high, thanks to a sharp improvement in margins of refineries. The average global price of crude palm oil (CPO) declined by $25 to $551 a tonne for September, which made its import viable for Indian refineries. In contrast, the price of refined oil (refined, bleached and deodorised or RBD) remained flat at $578 a tonne.
“Edible oil refineries are operating at a very thin margin. The $25 a tonne difference between CPO and RBD helped the import decision in favour of CPO,” said B V Mehta, executive director, Solvent Extractors’ Association.
Data from the latter body showed India’s vegetable oil import at 1.42 million tonnes for September, from 1.47 million tonnes for August. Palm oil was 65 per cent of the total, the highest proportion since March. Soybean, sunflower, rapeseed and others were 35 per cent.
Overall import during November 2017 to September 2018 was nearly 13.8 mt, from close to 14.3 mt in the comparable period last year. India imports around 15.5 mt annually to meet its growing consumer demand.
“In spite of rupee depreciation, vegetable oil import jumped in August and September, as supply pipelines had dried due to lesser import during the previous months. Coupled with improved parity in import of palm oil, on reduction in the spread between palm oil and (the other) soft oils,” said an industry expert. Palm oil has a major share in India’s overall import.
Prices have fallen by 11-25 per cent abroad over the past year, due to excess supply and also reduced demand from India, one of the largest players. The rupee has depreciated by 15 per cent during this time, making import costlier.
The Union ministry of agriculture’s target is 36 mt of oilseed production for 2018-19, compared to 31.3 mt the previous season.