India's vegetable oil imports soared 27 percent from a month ago to an all-time high in January on purchases of cheap palm oil, a trade body said, raising the prospect for further curbs on cheap imports from Indonesia and Malaysia.
India, the world's top vegetable oil importer, could buy as much as 11 million tonnes in the year to October - well above recent averages of 8-9 million tonnes - if the government does not restrict palm oil imports, the head of the top industry body said on Thursday.
Malaysia, the world's No 2 producer of palm oil, made exports duty-free from January 1, and Indian buying soared until New Delhi slapped on import duties mid-month to protect local producers. "Imports could be 10.5-11.0 million tonnes if the current trend of unabated cheap imports continues in the absence of any corrective steps by the government," B.V. Mehta, executive director of the Solvent Extractors' Association, said in an interview.
As India's population grows in size and wealth, demand for cooking oil is rising at about 5 percent a year. Consumption hit 16.7 million tonnes in the marketing year ended October 31 and could rise to as much as 17.5 million tonnes in 2012/13, Mehta said. New Delhi tries to encourage local production of oilseeds, partly by guaranteeing minimum prices to farmers, but has had limited success.
For this year to end-October 2013, imports are likely to meet 63 percent of demand, up from recent averages of about half. India's vegetable oil imports rose to 1.2 million tonnes last month, with palm oil imports surging 13 percent on the month to a record 893,313 tonnes, the trade body's latest data showed.
Palm oil accounts for about 80 percent of total imports. Trade bodies have been demanding that the import duty on crude edible oil should be raised to 10 percent, while refined oil imports should be taxed at 20 percent, ensuring at least a 10 percent duty differential between the two variants to protect domestic oilseeds growers and refiners.
"A zero export duty regime in Malaysia pushed palm oil imports to a record level," said Sandeep Bajoria, chief executive of the Mumbai-based Sunvin Group, an importer of edible oils. The record imports could worsen on India's current account deficit, which hit 5.4 percent of gross domestic product (GDP) in the September quarter and, according to some analysts, could reach nearly 8 percent in the December quarter.
India has taken to taxing imports to protect domestic oilseed growers and crushers from aggressive pricing by Malaysia and rival Indonesia, the world's biggest palm oil producer. India also buys a small quantity of soyoil from Argentina and Brazil. New Delhi applied a 2.5 percent import duty on crude palm oil during the second half of January to try to curb imports. Traders said palm oil prices were $30 per tonne lower in the first half of last month as a result of Malaysia's decision to remove export duties.
Comments
Comments are closed.