NEW DELHI: India’s refined palm oil imports could surge almost 69 percent to a record high in the year ending October, a key industry official said, as consumption picks up pace ahead of the festival season starting next month.
Higher purchases will heighten calls to raise import duties to protect local oilseed growers and refiners, many of whom are operating at about a third of capacity as they battle cheap supplies from top exporters Indonesia and Malaysia.
“If the trend that favours the imports of refined palm oil continues, then domestic refiners would turn into packers of imported refined oil, instead of being processors of the crude palm oil,” said B. V. Mehta, executive director of the Mumbai-based trade body Solvent Extractors’ Association.
Imports of refined palm oil by the world’s top buyer of vegetable oils could be as high as 2.7 million tonnes in the year to Oct. 31, up 1.1 million from a year ago, Mehta said.
India’s imports of refined, bleached and deodorised (RBD) palmolein hit a record 373,837 tonnes in May, prompting industry experts to see a continuing trend. A dip in June to 296,230 tonnes was mostly due to weakness in the rupee, which made imports more expensive.
The SEA will publish July import figures in mid-August.
India’s refiners have lobbied for government intervention to make imports of refined palm oil more expensive, but Delhi’s worries about inflation, now running at around 5 percent, have stalled any action.
The country now levies a 2.5 percent duty on crude palm oil imports and 7.5 percent on refined palm oil imports.
NARROW SPREAD TO SUPPORT IMPORTS
Refined palm oil imports could come in at 250,000-300,000 tonnes per month in the four months to Oct. 31, supported by the spread between crude and the refined variant that has dropped to around $5 per tonne, traders said.
On some days, there is no difference in price, traders added. A year ago, the differential was $30 to $40 per tonne.
Refined palm oil’s premium to crude has been shrinking since last year because high output has prompted the world’s top two producers of the edible oil to adopt export measures to promote sales of the refined product.
Demand for refined palm oil will also get a boost as India gears up for its festival and wedding season, which starts next month and sees out the year, with an accompanying rise in consumption.
India imports about 60 percent of its cooking oil demand of 17 million to 18 million tonnes, with palm oil’s share at about 80 percent of the imports.
India’s total 2012/13 palm oil imports could be 8.7 million tonnes, up 13 percent from a year earlier, said Govindbhai Patel, a managing partner at GG Patel & Nikhil Research Co.
Projected total palm oil imports include 6.2 million tonnes of the crude variant, said Patel, a crop statistician who has been in the edible oil trade for three decades. – Reuters
Source : The Star