The Solvent Extractors Association of India (SEA) highlighted that many traders are shifting to Indonesia for imports of palm oil amid reports that India might curb shipments from Malaysia which used strong words in the United Nations on India’s decision to abrogate Article 370 in Jammu & Kashmir.
“The government imposed 5 per cent safeguard duty on RBD Palmolein/Palm Oil of Malaysian origin with effect from September 4. In view of this, now the duty difference between crude and refined palm oil has increased to 10 per cent irrespective of any origin,” the association said.
Although the import of RBD palmolein remained more or less same in September, the quantity of imports from Malaysia reduced to one-third from previous month’s import, it added.
SEA’s Executive director BV Mehta attributed the fall in vegetable oil imports to carry-over stock and imposition of safeguard duty.
“Secondly, recent report appeared in Media, that Government of India may take some action to curtail imports of palm oil from Malaysia following the hostile attitude of Malaysia at the UN in September when Malaysia charged that India invaded and occupied J&K. Fearing some action by Government of India in retaliation, many importer/refiners shifting their buying from Malaysia to Indonesia for November-December shipment,” the statement said.
Imports of vegetable oils (comprising edible and non-edible oil) during September declined by 13 per cent to 13,03,976 tonnes compared to 14,91,174 tonnes in the year-ago period.
Imports of edible oil fell to 12,54,443 tonnes in September 2019, from 14,22,003 tonnes in the year-ago period, while non-edible oil imports fell to 49,533 tonnes from 69,171 tonnes during the period under review.
However, the overall imports of vegetable oils during November 2018 to September 2019 went up by 3 per cent to 14.17 million tonnes, SEA said in a statement.
During November 2018 to September 2019, SEA said imports of refined oil (RBD palmolein) increased to 26,12,394 tonnes from 19,98,813 tonnes in same period of last year, due to lower duty on palmolein imported from Malaysia.
This resulted in lower imports of crude oil which stood at 109,69,087 tonnes from 113,43,273 tonnes during the same period of last year, reducing capacity utilization of domestic industry.
During November 2018-September 2019, palm oil imports has increased to 86,30,680 tonnes from 79,47,472 tonnes during the same period of last year, due to higher import of RBD palmolein.
During the period under consideration, soft oils import decreased to 49,50,801 tonnes from 53,94,614 tonnes.