India's vegetable oil imports decline 28% year-on-year in January

New Delhi: India imported 1.2 million tonnes of vegetable oils in January 2024, 28 per cent lower than it shipped in the same month last year at about 1.7 million tonnes, data compiled by The Solvent Extractors' Association of India (SEA) showed on Monday.

Of the total imports, it consisted of 1.19 million tonnes of edible oils and 8,914 tonnes of non-edible oils in January, data showed.

The overall import of vegetable oils during the first quarter of the oil year during November-January is reported at 3.67 million tonnes compared to 4.77 million tonnes during the same period of last year, down by 23 per cent year-on-year.

According to the industry body SEA, prices of edible oils, which are currently low, may go up this year due to lower production, global economic issues and supply constraints.

It said the availability of palm oil for edible oil requirements has come down as the main two producers Malaysia and Indonesia are diverting it for the production of biodiesel. This could increase prices this year.

"World production of palm oil be seasonally low in Jan/March 2024, enforcing a reduction of stocks both in production and importing countries," the industry said in a release.

In India, sunflower oil imports are seen diminishing this season owing to shrinking total import requirements and soya oil regaining market share.

India is the world's second-largest consumer and number one vegetable oil importer, and it meets 60 per cent of its needs through imports.

A large part of it is palm oil and its derivatives, which are imported from Indonesia and Malaysia. India majorly consumes mustard, palm, soybean, and sunflower-derived edible oils.

In December 2023, the central government extended the reduced import duty regime for some of the key edible oils by a year as part of its interventions to keep food inflation in check.

The reduced duty, which was set to end in March 2024, will continue till March 2025. The basic import duty on refined soyabean oil and refined sunflower oil was reduced from 17.5 per cent to 12.5 per cent.

The basic import duty is an important factor that impacts the landed cost of edible oils which in turn affects domestic prices. Reduction in import duty will benefit the consumers, as it will help in easing domestic retail prices.