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Thanks to a larger domestic oilseeds crop and a squeeze in demand for edible oils due to higher prices, India’s edible oil imports declined by 5 lakh tonnes (lt) during the 2023-24 oil year (November-October). Higher prices, particularly, impacted the demand among the lower segment of society. According to data compiled by the Solvent Extractors’ Association of India (SEA), India imported 159.
6 lt of edible oils during the 2023-24 season against 164.7 lt in the previous year..
BV Mehta, Executive Director of SEA, said India needs about an additional 10 lt of edible oils annually to meet the growing population and increase in per capita consumption. With normal monsoon, India is harvesting nearly 12.5 million tonnes (mt) of soyabean and 9.
5 mt of groundnut (in shell basis) in the kharif season of 2023-24, and it is expected to harvest 12.5-13 mt of rapeseed in rabi season. He said overall oilseeds production during 2024-25 may go up by 3.
5 mt. The bumper crop is likely to augment the domestic availability and help reduce the import demand by 1 mt in 2024-25. Mehta said international price firmed up due to various reasons in the past one year.
This reflected in the increase in domestic prices of edible oils and reduction in import to some extent. The CIF price of RBD palmolein increased from $876 a tonne in November 2023 to $1,135 in October 2024, and that of CPO (crude palm oil) increased from $897 a tonne in November 2023 to $1,170 in October 2024. CIF price of crude soyabean oil increased from $1,068 a tonne in November 2023 to $1,154 in October 2024, and that of crude sunflower oil increased from $979 a tonne to $1,168.
India has been importing edible oils since 1990s. The import volume was very low during the initial years. However, the import volume has increased by 2.
2 times in the last 20 years (2003-04 to 2023-24), while cost of import has gone up nearly 13 times. During the oil year 2023-24, India spent nearly ₹1.31 lakh crore ($15.
9 billion) for the import of 159.6 lt of edible oils. The country spent around ₹1.
38 lakh crore ($16.65 billion) to import 164.7 lt of edible oils during the oil year 2022-23.
Overall import of edible oils increased from 132 lt in 2019-20 to 159.6 lt in 2023-24. Mehta said the major change in the last five years was sharp increase in import of RBD palmolein from 4.
2 lt in 2019-20 to 19.3 lt in 2023-24, thanks to the inverted duty structure at origins and lower duty difference between refined and crude oils at 8.25 per cent in India.
This encouraged larger shipment of RBD palmolein into India leading to the increase in overall palm oil shipment from 72 lt in 2019-20 to 90.2 lt in 2023-24. The soft oils share increased from 59 lt to 69.
5 lt during the period. The share of refined oil increased from 3 per cent to 12 per cent in the last five years, while share of crude edible oil decreased from 97 per cent to 88 per cent. India needs about 21 lt of edible oils per month and operating at 30-35 days’ inventory.
During the oil year 2023-24, Indonesia shipped 31.92 lt of CPO and 16.33 lt of RBD palmolein followed by Malaysia with 28.
69 lt of CPO, and 2.93 lt of RBD palmolein. India imported 21.
47 lt of crude soyabean de-gummed oil from Argentina, followed by Brazil at 9.49 lt. Russia exported 18.
06 lt of crude sunflower oil to India. This was followed by Romania with 6.29 lt, Ukraine with 5.
60 lt, and Argentina with 3.95 lt. In his observation for the oil year 2024-25, the SEA Executive Director said import of edible oils is likely to be down by 10 lt.
Stating that India was fortunate to have normal rains in last four years, he said the average production of oilseeds is estimated to be about 38 mt in the oil year 2023-24 as against 34.2 mt in 2022-23. In addition to this, India is expected to produce 11 mt of cottonseed and half a mt of copra (coconut) during the period.
Current edible oil consumption in India is about 25.5-26 mt, growing at 3-4 per cent per annum. By 2029-30, India may need 28-30 mt of edible oil while local production is expected to be at 15-17 mt.
India will continue to import edible oils to bridge the gap between demand and supply, he said, adding, the quantum of type of oil imports will depend on the price parity and the availability in the international market. Comments.
