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Diving Into India's Edible Oil Import Trends In 2022-23
3 months ago
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Diving Into India's Edible Oil Import Trends In 2022-23

Summary
India's edible oil market in 2022-23 saw a decrease in import value to Rs. 1.38 lakh crore, but a 17.39% increase in quantity to 164.7 lakh tons. Palm oil dominated imports, comprising 59% of the total.

India, a major player in the global edible Oil market, witnessed intriguing dynamics in the edible Oil industry during the Oil year 2022-23. A closer look at the data reveals key insights into import trends, changes in consumption patterns, and the impact on the domestic refining industry.

Major Highlights

Here are the details:

Edible Oil Import Volume: In the Oil year 2022-23, India imported approximately Rs. 1.38 lakh crore worth of edible Oil, witnessing a notable decrease from Rs. 1.57 lakh crore in 2020-21. Despite the drop in value, the quantity of imported edible Oil surged by 17.39%, reaching 164.7 lakh tons.

Quarterly Fluctuations: The quarterly trends reveal a dynamic scenario. Edible Oil imports saw a dip from 47.46 lakh tons in Q1 to 32.55 lakh tons in Q2. However, a significant upswing occurred in Q3, reaching 41.20 lakh tons, and further rising to 43.43 lakh tons in Q4. Q3 surge can be attributed to a sharp reduction in domestic prices, boosting demand.

Imports Surge Driving Forces: BV Mehta, Executive Director of the Solvent Extractors’ Association of India (SEA), attributes this surge to the low 5.5% duty on Crude Palm Oil (CPO), Soybean Oil, and Sunflower Oil. This influx has positioned India as a key destination for excess oil supplies, with RBD Palmolein imports constituting over 25% of total Palm Oil imports.

Domestic Refining Industry Impact: The surge in imports, especially RBD Palmolein, is significantly impacting the domestic refining industry. With overcapacity challenges, the industry grapples with underutilization of its installed capacity, reflecting the need for strategic adjustments to maintain competitiveness.

Palm Oil Dominance: Palm Oil imports took center stage, with a substantial increase of 24% in the oil year 2022-23. The share of Palm Oil products in the total edible Oil import basket rose to 59%, up from 56% in the previous year. Indonesia, Malaysia, and Thailand emerged as key contributors to India’s Palm Oil imports.

Soft Oils Dynamics: While the overall import of soft Oils saw a marginal increase, the share of soft Oils in the total edible Oil import basket reduced from 44% to 41%. Sunflower Oil imports surged to 30.01 lakh tons, whereas Soybean Oil imports declined to 36.76 lakh tons during the period. The ratio of refined Oil to crude Oil in the total edible Oil basket stood at 13:87.

Government Initiatives: To provide relief to domestic consumers, the government reduced import duties on edible Oils from June 2021 to June 2023. Currently, CPO, Soybean Oil, and Sunflower Oil attract a 5.5% import duty, while RBD Palmolein, refined Soybean Oil, and Sunflower Oil attract a 13.75% duty.

OFB’s Insight

The edible Oil industry in India, marked by fluctuations in import trends and government interventions, stands at a crucial juncture. As the nation grapples with challenges in the domestic refining sector, it remains imperative to strike a balance between global competitiveness and safeguarding the interests of local industries.

The surge in imports, particularly Palm Oil, presents both opportunities and challenges, necessitating a strategic approach to maintain a resilient and sustainable industry.  As we move forward, monitoring global prices, government policies, and industry adaptations will be crucial to understanding the trajectory of India’s edible Oil sector.

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