India’s Edible Oil Imports Hit Six-Year High in May

India’s monthly refined edible oil imports hit a six-year high in May following cuts in import duty by the government under the Comprehensive Economic Cooperation Agreement (CECA) between India and Malaysia.  Effective January 1, overall import duty on crude palm oil (CPO) from Malaysia, Indonesia and other member states of the Association of the South East Asian Nations (ASEAN) was cut to 40% from 44% earlier, while that on refined edible oil (RBD or refined, bleached deodorized palmolein) from Malaysia was slashed to 45% and from other countries to 50%.  The earlier duty was 54% irrespective of the source.  

The duty cut has taken its toll on Indian edible oil refineries, with their capacity utilisation declining to below the survival level of 35%.  Oilseed prices also remained subdued due to weak demand from crushing mills. Data compiled by the Solvent Extractors Association showed India’s import of RBD palmolein rose from 130,000 MT  in December 2018 to 371,060 MT in May 2019, the highest in any single month since May 2013.  Industry sources fear further increase in import. Total vegetable oil import in May was 1.22 million MT, up 5% from 1.29 million in May last year. Palm oil accounted for 69% of this total.