NEW DELHI: India’s palm oil imports dropped almost 10 percent in February from an all-time high in the previous month, a trade body said on Thursday, hurt by a duty hike to curb cheap imports from Southeast Asia and record stock levels.
India is the world’s biggest importer of vegetable oils and leading producers Indonesia and Malaysia have been vying to make their oils more attractive by varying taxes. India retaliated with an import duty hike on crude palm oil in January.
It imports about 8 million to 9 million tonnes a year, or about half its total demand, with palm oil making up about 80 percent of imports.
India’s vegetable oil imports fell about 17 percent to 969,175 tonnes last month, with palm oil imports dropping to 805,362 tonnes, the Solvent Extractors’ Association (SEA) said in a statement.
Huge stocks built up following higher imports in recent months and softer domestic demand as the rapeseed harvest started led to lower imports in February, said B.V. Mehta, executive director of the Mumbai-based trade body.
The trade data showed total stocks at the end of February rose around 12 percent from January to about 2 million tonnes. SEA’s estimates include both stocks at ports and pipelines.
The record stocks are putting further pressure on domestic prices, which could hit planting in the summer, and are likely to keep imports muted this month too.
“Imports are expected to be down in March due to a higher level of unsold stocks,” said Sandeep Bajoria, chief executive of edible oil importer Sunvin Group, based in Mumbai.
In January, India’s vegetable oil imports rose to 1.2 million tonnes, with palm oil imports surging 13 percent on the month to a record 893,313 tonnes.
New Delhi slapped a duty of 2.5 percent on crude palm oil during the second half of January to curb imports, but refiners have demanded a further rise to protect themselves and domestic oilseed growers.
As India’s population grows in size and wealth, demand for cooking oils is rising. New Delhi tries to encourage local oilseed production, partly by guaranteeing minimum prices to farmers, but has had limited success.
India buys mainly palm oil from Malaysia and Indonesia and a small quantity of soyoil from Brazil and Argentina.
Soyoil and sunflower imports also fell last month after huge imports in January, for use at celebrations during the wedding season just ending.
Soyoil imports fell 39 percent to 62,585 tonnes last month, while sunflower imports dropped 35 percent to 84,310 tonnes from the previous month. – Reuters
Source : The Star