Edible Oil Imports in India Decreased by 5% Since the Start of the Season Compared to Last Season

Edible oil imports into India have decreased by 5% to 8.67 million tons over the first seven months of the 2023/24 marketing year (November-October) compared to the same period in the previous marketing year.

B.V. Mehta, Executive Director of the Solvent Extractors' Association of India (SEA), told FE that the reduction in imports this year is due to high mustard and soybean harvests in the domestic market and rising global prices.

Palm oil imports from November to May (2023-24) amounted to 4.97 million tons, 7% less than the previous year. Soybean oil imports totaled 1.59 million tons, down 22% year-on-year, while sunflower oil imports increased by 20% to 1.99 million tons this year.

Floods in Brazil and worker strikes in Argentina led to a sharp rise in global soybean oil prices, while sunflower oil supplies from Russia and Ukraine decreased due to the "dead season." Meanwhile, palm oil prices, which is the main imported product, remained more or less stable in both international and domestic markets.

It is forecasted that the total volume of edible oil imports in the current oil year will reduce to approximately 16 million tons from a record 16.47 million tons in the 2022-23 oil year. Edible oil imports into India – palm, soybean, and sunflower oils – in 2022/23 increased by 17% year-on-year to a record 16.47 million tons, driven by reduced import duties on oil to 5.5%.

"The rise in prices for sunflower and soybean oils led to an increase in mustard seed prices, which exceeded the minimum support price (MSP) of 5650 rupees per quintal and reached over 6200 rupees per quintal, signaling a positive outlook for farmers regarding the expansion of oilseed acreage in the next kharif season," Mehta noted.

As of June 1, edible oil stocks in India, including port and pipeline inventories, amounted to 2.41 million tons, down from 2.94 million tons reported a year ago.

India imports about 58% of its total annual edible oil consumption, which amounts to around 24-25 million tons. Regarding domestic production, oils like mustard (40%), soybean (24%), and peanut (7%) hold significant shares.

Earlier this year, the government extended the lower import duties on palm, soybean, and sunflower oils for a year until March 31, 2025, which industry representatives believe will negatively impact processing and prices of domestic oilseeds.

Due to the record volume of imports, domestic prices of edible oils like mustard and soybean have decreased.

Mustard oil and refined oil prices sharply dropped by 8.59% and 10.89%, respectively, in May year-on-year, while overall inflation in the oils and fats category decreased by 6.71%.