Global prices may rise this year: SEA
The imports of edible oils – palm, soyabean, and sunflower in the first quarter of the 2023-24 oil year (October-September) declined by 23% to 3.64 million tonnes (mt) compared to the same period last year, the trade body Solvent Extractors’ Association of India (SEA) said on Monday.Last month, the country imported 1.2 mt of edible oil in both crude and refined form, a 28% decline compared to the previous year.As on February 1, the total edible oil stock stood at 2.64 mt, a decline of 7.64% compared to the year-ago period.
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The SEA stated that prices of edible oils, which are currently low, may go up this year because of prospects of lower output, global economic issues, and supply constraints.“The availability of palm oil for edible oil requirements has come down as the two main two producers – Malaysia and Indonesia are diverting it for the production of bio-diesel this could result in an increase in prices this year,” according to a SEA statement.
The country’s import of edible oils – palm, soyabean, and sunflower – rose 17% year-on-year to a record 16.47 mt in the 2022-23 oil year, helped by lower import tariffs.India imports about 58% of the total annual edible oil consumption of around 24 to 25 mt.In terms of share in domestic output, the share of oils includes mustard (40%), soyabean (24%), and groundnut (7%), among others.The share of palm oil, including crude and refined, in total edible oil imports was 59% in 2022-23. Palm oil is mostly imported from Indonesia, Malaysia, and Thailand.
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Imports of crude soyabean and sunflower oil last year were 3.67 mt and 3 mt, respectively. Soyabean oil was sourced from Argentina and Brazil, while sunflower oil was sourced from Russia and UkraineLanded prices of crude palm oil (at Mumbai port), which hold a major chunk in the country’s import basket, declined by 8% to $935/tonne on February 9, compared to $1,015 a year ago.Landed prices of crude soyabean and sunflower oil have fallen 27% and 24% respectively to $927/tonne and $920/tonne.
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The government last month had extended the lower import duty structure for palm, soyabean and sunflower oils by a year till March 31, 2025, which the industry had stated would adversely impact processing and prices of domestic oilseeds.Currently, crude palm, soyabean and sunflower oil imports attract only a 5% agri infra cess and a 10% education cess, resulting in a total tax incidence of 5.5%.Due to large imports of edible oil, the retail inflation in the oil and fat category has been in the negative zone since February 2023 as global prices softened.Inflation in cooking oil declined by 14.96% January, 2024 on year.
