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OILS AND FATS

Increase in import of veg oils in March 2019 by 26% to 14,46,557 tonne
Tuesday, 23 April, 2019, 14 : 00 PM [IST]
Our Bureau, Mumbai
The Solvent Extractors’ Association of India has compiled the import data of vegetable oils (edible and non-edible) for the month of March 2019. Import of vegetable oils during March 2019 sharply increased by 26 per cent to 1,446,557 tonne compared to 1,146,051 tonne in March 2018, consisting of 13,93,255 tonne of edible oils and 53,302 tonne of non-edible oils. The overall import of vegetable oils between November 2018 and March 2019 is reported at 6,309,406 tonne compared to 5,931,829 tonne, i.e., up by six per cent.

Import of vegetable oil (edible and non-edible) between November 2018 and March 2019
    (Quantity in metric tonne [MT])

Month

2018-19

2017-18

%

Change

Edible

Non-edible

Total

Edible

Non-edible

Total

November 2018

10,73,353

60,540

11,33,893

12,25,315

23,495

12,48,810

(-) 9%

December 2018

11,45,794

65,370

12,11,164

10,58,289

30,494

10,88,783

(+) 11%

January 2019

12,10,603

64,656

12,75,259

12,46,847

44,294

12,91,141

(-) 1.2%

February 2019

11,82,062

60,471

12,42,533

11,24,999

32,045

11,57,044

(+) 7.4%

March 2019

13,93,255

53,302

14,46,557

11,22,685

23,366

11,46,051

(+) 26.%

Total

60,05,067

3,04,339

63,09,406

57,78,135

1,53,694

59,31,829

(+) 6%



Sharp increase in import of RBD Palmolein
The Ministry of Finance, with effect from January 1, 2019, reduced the import duty on palm oil and also reduced the duty difference between crude and palm oil from 10 per cent to five per cent on palmolein to be imported from Malaysia.

As anticipated, the worst fears have come true, and India is flooded with RBD Palmolein from Malaysia. Reduction in the duty difference between CPO and Palmolein sourced from Malaysia has resulted in RBD Palmolein imports going up from 1,30,000 tonne in December 2018 to over 3,00,000 tonne in March 2019.

This development has also the potential of sounding the death knell of the palm refining industry in India. This also has seriously impacted the prices of mustard seed and being currently quoted Rs 700-800 per quintal below the MSP (minimum support price) of Rs 4,200 per quintal.

Needless to mention, mustard harvest is nearly completed and arrivals in mandies are at peak level. This will have a huge negative impact on incomes of mustard farmers. This anomaly needs to be corrected. If this aberration is not rectified, the farmer will be greatly affected and discouraged, while domestic palm refineries would be destroyed and Make in India would remain a pipe dream. There is urgent need to create duty difference of 10 per cent between CPO and RBD Palmolein, as was prevailing before January 1, 2019 to survive in this situation.

Stock position at port and in pipeline
The stock of edible oils as on April 1, 2019 at various ports is estimated at 9,70,000 tonne (CPO 4,10,000 tonne, RBD Palmolein 250,000 tonne, Degummed Soybean Oil 1,40,000 tonne and Crude Sunflower Oil 170,000 tonne to and about 14,00,000 tonne in pipelines).

Total stock at ports and in pipelines is reported at 23,70,000 tonne, increased by 1,75,000 tonne from 21,95,000 tonne as on March 1, 2019.

India’s monthly requirement is about 19 lakh tonne and operate at 30 days’ stock, against which currently holding stock over 23.70 lakh tonne equal to 37 days’ requirements.

Stock position at ports and pipelines                                          (Quantity in ’000 MT)
1-Apr-19 1-Mar-19 1-Feb-19 1-Jan-19 1-Dec-18 1-Nov-18 1-Oct-18 1-Sep-18 1-Aug-18 1-Jul-18 1-Jun-18 1-May-18 1-Apr-18
970 915 805 805 861 895 923 994 928 948 1,002 1,068 770
1,400 1,280 1,305 1,220 1,330 1,430 1,630 1,580 1,547 1,570 1,660 1,270 1,342
2,370 2,195 2,110 2,025 2,191 2,325 2,553 2,574 2,475 2,518 2,662 2,338 2,112

Import of refined and crude oil ratio
Between November 2018 and March 2019, the import of refined oil (RBD Palmolein) increased to 9,60,573 tonne from 7,70,581 tonne in same period of last year. However, the import of crude oil also marginally increased and reported at 50,44,494 tonne from 50,07,554 tonne during the same period of last year. During November and Deember 2018, the share of RBD Palmolein was just 10 to 12 per cent, whereas now it has increased to 22 per cent.

Import of refined and crude edible oils (ratio)                               (Quantity in MT)
Year (November-October) Refined oils % Crude oils % Total
Nov-18 1,08,911 12% 9,64,442 88% 10,73,353
Dec-18 1,30,459 10% 10,15,335 90% 11,45,794
Jan-19 1,67,429 14% 10,43,174 86% 12,10,603
Feb-19 2,41,101 20% 9,40,961 80% 11,82,062
Mar-19 3,12,673 22% 10,80,582 78% 13,93,255
November 2018-March 2019 9,60,573 16% 50,44,494 84% 60,05,067
           
November 2017– March 2018          
    13%   87%  
  7,70,581   50,07,554   57,78,135
2017-18 21,35,780 15% 1,23,80,752 85% 1,45,16,532
2016-17 28,70,928 19% 1,22,06,492 81% 1,50,77,420
2015-16 26,23,002 18% 1,19,48,336 82% 1,45,71,338
2014-15 16,59,070 12% 1,27,62,201 88% 1,44,21,271


Import of palm and soft oil ratio: Favouring palm oil
Between November 2018 and March 2019, palm oil import has marginally increased to 38,72,909 tonne from 37,95,214 tonne during the same period of last year. However, soft oils import jumped in March 2018, and total import increased to 21,32,158 tonne from 19,82,921 tonne during the same period of last year.

Import of palm oil and soft oil (ratio)                                               (Quantity in MT)

Year (November-October) Palm Oil Soft Oil % Total
(RBD Palmolein + CPO Soybean Sunflower Rape Others Total
 
+ Crude Olein + CPKO)
Nov-18 6,91,827 64% 2,03,734 1,65,550 12,242 - 3,81,526 36% 10,73,353
Dec-18 8,11,700 71% 85,404 2,35,824 12,866 - 3,34,094 29% 11,45,794
Jan-19 8,15,236 67% 1,85,906 2,00,027 9,434 - 3,95,367 33% 12,10,603
Feb-19 7,51,703 64% 2,20,376 2,00,358 9,625 - 4,30,359 36% 11,82,062
Mar-19 8,02,443 58% 2,92,925 2,97,887 - - 5,90,812 42% 13,93,255
November2018-March 2019 38,72,909 64% 9,88,345 10,99,646 44,167 - 21,32,158 36% 60,05,067
                   
November 2017-March 2018                  
                   
                   
                   
  37,95,214   8,26,937 10,24,096 1,31,888   19,82,921 34% 57,78,135
    66%       -      
2017-18 87,01,062 60% 30,47,040 25,24,793 2,40,625 3,012 58,15,470 40% 1,45,16,532
2016-17 92,93,717 62% 33,16,207 21,68,754 2,92,652 6,090 57,83,703 38% 1,50,77,420
2015-16 84,42,840 58% 42,34,809 15,16,220 3,77,469 - 61,28,498 42% 1,45,71,338
2014-15 95,36,904 66% 29,85,944 15,42,599 3,55,824 - 48,84,367 34% 1,44,21,271


Average prices and rupee depreciation                       (Price in $/CIF Indian Port/Tonne)
Oils Mar-19 Feb-19 Jan-19 Dec-18 Nov-18 Oct-18 Sep-18 Aug-18 Jul-18 Jun-18 May-18 Apr-18 Mar-18
RBD Palmolein 559 585 570 518 510 568 575 578 592 631 661 673 678
Crude Palm Oil 520 550 538 482 472 529 551 565 583 623 652 664 671
Crude Soybean Oil 711 760 709 679 682 706 689 691 709 727 771 808 804

In the last one year, in the international market, prices of various edible oils have gone down in the range of 11 per cent to 22 per cent due to excess supply in the world market, but rupee is depreciated by nearly seven per cent in the last one year.

Import of non-edible oils
The import of non-edible oils during March 2019 was reported at 53,302 tonne compared to 23,366 tonne in March 2018. The overall import of non-edible oils between November 2018 and March 2019 is reported at 3,04,339 tonne (almost doubled) compared to 1,53,694 tonne during the same period last year, i.e., up by 98 per cent, thanks to nil duty on P F A D and RBD Palm Stearin. P F A D, C P S and RBD Palm Stearin are the major import of non-edible oils.
 
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