There was a significant surge in the demand for edible oil in India in August, both domestically and globally, primarily driven by a sharp drop in prices.
According to data compiled by the Solvent Extractors' Association of India (SEA), India imported 18.52 lakh tonnes (lt) of edible oil in August, marking a substantial increase compared to the 13.75 lt imported during the same period the previous year. This represents a notable growth of 34.69 percent. July 2023 also saw a high import of 17.55 lt of edible oil.
Over the course of the November to August period for the oil year 2022-23, India imported a total of 139.74 lt of edible oil. This is a substantial increase from the 110.70 lt imported during the corresponding period in 2021-22, reflecting a growth rate of 26.23 percent.
Moreover, the cumulative import of vegetable oils, encompassing both edible and non-edible varieties, during the first ten months of the 2022-23 fiscal year reached 141.21 lt.
BV Mehta, the Executive Director of SEA, predicts that India is on track for a record-breaking import of over 165 lt of edible oil by the end of the current oil year, which concludes in October. This would surpass India's previous highest import figure of 151 lt recorded in 2016-17.
Mehta attributes the surge in edible oil imports in August to a sharp reduction in domestic edible oil prices. This price decrease reignited demand, even though there was already ample availability of edible oil in the domestic market. He notes that crude palm oil (CPO) imports rebounded and regained competitiveness against soybean and other oils, amounting to 8.24 lt in August, a slight decline from the 8.41 lt imported in July.
Furthermore, imports of refined, bleached, and deodorized (RBD) palmolein increased from 2.17 lt in July to 2.83 lt in August. In total, palm product imports reached 11.28 lt in August, up from 10.86 lt in July.
Soybean oil imports also witnessed growth, rising to 3.58 lt in August, compared to 3.42 lt in July. Similarly, sunflower oil imports increased to 3.66 lt in August, surpassing the 3.27 lt reported in the previous month.
Mehta attributes the influx of imports to the currently low 5.5 percent duty on CPO, soybean oil, and sunflower oil, which has transformed India into a prime destination for excess oil supplies.
Consequently, the import of palm products saw a sharp increase to 82.46 lt during the November to August period of the 2022-23 oil year, driven by price parity, in contrast to 58.56 lt during the same period in 2021-22. Shipments of sunflower and soybean oils have also surged significantly in the last five months of the 2022-23 oil year.
