Indian imports of vegetable oils in September rose 67% month on month to 1.76 million mt as lower duties helped push palm oil imports to a historic high, according to data released by the country’s vegetable oil trade body on Oct. 13.
September palm oil imports surged to 1.26 million mt, up 68% month on month since it attracts a lower import duty compared to soft oils like soybean oil and sunflower oil, the Solvent Extractors’ Association of India said.
India — the largest buyer of vegetable oils in the world — imports about 14 million-15 million mt/year. Due to its cost advantage, palm oil accounts for more than half of those imports.
However, as prices of all vegetable oils climbed to record highs this year, palm oil’s share of the price-sensitive Indian market has risen to 63% in the current 2020-21 marketing year (November-October) from 54% in 2019-20, the October trade data showed.
Between November 2020 and September 2021, palm oil imports increased by 18% year on year to 7.63 million mt, while import of soft oils including soybean and sunflower fell 19% to 4.46 million mt, according to the SEA.
Malaysia remained the major supplier of palm oil products to India, edging out shipments from larger rival Indonesia. For soybean oil and sunflower oil, Argentina and Ukraine were India’s largest suppliers in the 2020-21 marketing year.
September’s jump in imports has pushed India’s total vegetable oil imports in the 11 months of the 2020-21 marketing year to 12.09 million mt, which is about 1.1 million mt lower than the full 12-month import of 13.18 million mt in 2019-20.
India cuts import taxes
Separately, India’s Ministry of Finance reduced import taxes on edible oils on Oct. 13, the fourth time they have been slashed since June as the government tries to ease surging retail prices of essential cooking oils.
According to the latest directive, the effective import tax on crude palm oil has been reduced to 8.25% from 24.75%. Refined palm oil products will be taxed at 19.25%, down from the earlier 35.75%.
The directive has also reduced taxes on crude and refined soybean oil, sunflower oils and will be in effect from Oct.14 to March 31, 2022, the ministry notification said.
India had previously changed its edible oil duties on Sept. 11 and before that on June 30.
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