MUMBAI (Commoditiescontrol) – India palm oil imports have gathered momentum in the recent past, following an elevated demand from the country's growing population amid rising crushing disparity in the domestic market.
It is to be noted that India is the largest consumer of palm oil in the world, accounting for about 17 per cent of the world palm oil consumption.
The import of palm oil has risen during the last eight years, i.e. from 2006-07 to 2014-15. The share of palm oil in the entire basket of edible oil import during 2014-15, stands at 65 per cent, while other oil imports collectively make 35 per cent of the total imports. In absolute terms, the import of palm oil has increased to 95.37 lakh metric tonnes in 2014-15, as compared to 79.58 lakh metric tonnes in the year ago period.
However, the percentage share of palm oil as against import of other soft oils have gone down over the past five years, owing to global imbalances and rising price trends. Adding to that, it is noteworthy that India's dependency on palm oil has increased over the past decade, owing to cheaper variety and growing population in the Indian sub-continent.
Among the varieties of palm oil, crude palm oil has seen the highest imports, compared to RBD palmolein and crude palmolein. The crude palm oil alone accounted for 53 per cent of the total palm oil imports in the oil year 2014-15, indicating a preference for the crude palm oil over the latter.
However, it has been seen that the share of soybean and sunflower oil imports has been rising, as against palm oil. This is basically because, soybean oil in the recent past has seen a falling price; whereas, palm oil, of all variants, has witnessed price trending upwards. Therefore, demand is shifting from palm oil to soybean and sunflower oil.
Further to that, palm oil does not have any health benefits. So, consumers who can now afford higher variants are shifting their demand from palm oil.
The present oil year 2014-15 has seen a lower price trend, compared to the previous years, which has boosted domestic consumption in the form of expanded imports at around 144.21 lakh metric tonnes, from around 116.18 lakh metric tonnes in 2013-14.
The average price of crude palm oil (CPO) has hovered around $630/tonne, over the period October 2014 to October 2015. However, the average price of RBD Palmolein have been at a premium of around $25/tonne, to CPO. Following this price difference, consumption of CPO has always been higher than its latter counterpart.
However, imports of CPO have maintained a steady tone over the past six years, accounting for 50-60 per cent of the total palm oil imports.
Recent data, reflecting surge in Malaysian oil palm production, has further strengthened the cause of higher imports into the Indian sub-continent. Prices are expected to dip lower, following the oversupply in Malaysian and Indonesian markets.
The approach of winter season will impact palm oil prices, since palm oil freezes in winter. Hence, demand will be lower during that period of the year.
[Data Source: Solvent Extractors' Association of India]
(By Commoditiescontrol Bureau; +91-22-40015523)
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