Indian Market Flooded with Palm Oil

The Import of Vegetable Oils (edible & non-edible) for the month of July, 2023 reported at 1,771,833 tons compared to 1,214,353 tons in July 2022, consisting 1,755,834 tons of edible oils and 15,999 tons of non-edible oils i.e. up by 46%. The overall import of vegetable oils during first nine months of the oil year 2022-23, i.e. Nov’22.-July’ 23 is reported at 12,254,953 tons compared to 9,974,993 tons during the same period of last year i.e. up by 23%.

Looking to import of edible oils in first three quarter at 121.2 lakh tons, will not be surprised to see record import of over 15.0 to 15.5 million tons during current oil year ending Oct.’23. Earlier India’s highest import was 15.1 million tons in 2016-17.

Import of Vegetable Oil (Edible & Non-edible) Nov.’22 – July ’23 (Qty. in  MT)

Record Import of Edible Oil in July 2023 :

Sharp reduction in domestic prices of edible oils, demand has returned which is evident from the rising import in spite of better domestic availability reflecting in July data. The import of crude palm oil recovered and improved its competitiveness again soya and other oils and reported at 8.41 lakh tons compared to 4.66 lakh tons of previous month. The import of RBD Palmolien also jumped to 2.37 lakh tons from 2.17 tons from the previous month. The overall import of palm products during July 2023 reported at 10.86 lakh tons compared to 6.83 lakh tons in June 2023 while import of Soybean Oil reduced to 3.42 lakh tons from 4.37 lakh tons in previous month. The import of Sunflower Oil increased and reported at 3.27 lakh tons compared to 1.91 lakh tons in previous month. India is sitting on huge stock for nearly 45 days requirements and supply chain will be comfortable during ensuring festival season.

Monsoon and Sowing Update :

India’s monsoon is performing relatively well; most of the oilseeds production areas received rain enough for the sowing.  As on 4th August, 2023 North-West India and Central India have received excess rain while East & North East India are still in deficit, however country has a whole received 4% above the normal rain. The acreage under oilseeds as on 4th August,2023 reported at 179.6 lakh ha. against 175.1 lakh ha. during the same period of last year. The soybean acreage reported at 122.4 lakh ha. against 117.6 lakh ha up by 4.76 lakh ha.  The Castor acreage reported at 4.12 lakh ha against 2.89 lakh ha. up by 1.23 lakh ha.  The Groundnut crop is more or less same compared to last year.

Domestic Stock :

The Stock of edible oils as on 1st August.,2023 at various ports is provisionally estimated at 949,000 tons (CPO 255,000 tons, RBD Palmolein 187,000 tons, Degummed Soybean Oil 306,000 tons and Crude Sunflower Oil 201,000 tons) and pipeline stock  considering domestic production and consumption reported at 2,336,000 tons, The total stock  as on 1st August, 2023 reported at 3,285,000 tons compared to 2,940,000 tons as on 1st July, 2023.

Current Stock Position at Ports & Pipelines: (Qty. in ‘000 M.T.)

Import of Refined Oil Rising :-

Import of RBD Palmolein is rising fast. The overall refined oils (RBD Palmolein) reached at 14% (16.41 lakh tons) which was 5% (6.86 lakh tons) in 2020-21 and 3% (4.21 lakh tons) in 2019-20 only. This is seriously affecting working of domestic palm oil refining industry. The import of crude oil is also rising in last two month and reported at 104.82 lakh tons compared to 85.50 lakh tons in previous year.

Import of Refined & Crude Edible Oils (Ratio) Nov.’22 – July’23 (Qty. in MT)

Sharp increased in Palm Oil Import :

During Nov.’22 to July ’23, import of palm products sharply increased sharply due to price parity and reported at 7,117,834 tons compared to  4,861,122 tons of same period of last year. The share of palm oil increased to 59% from 50%, also soft oils import increased marginally. In last four months, shipment of sunflower and soybean oils sharply increased and overall import during  first nine months of the current oil year at 5,004,877 tons compared to 4,834,183 tons last year.  The share of soft oils reduced to 41% from 50%.  

Import of Palm Oil & Soft Oil (Ratio) Nov,’22 – July ’23 (Qty. in MT)

Indonesia and Malaysia are major Suppliers of Palm Products  to India :

Indonesia and Malaysia are the major suppliers of RBD Palmolein and Crude Palm Oil to India. During Nov.’22-July ’23, Indonesia was the major supplier and accounted for 2,627,478 tons of CPO (49%) and 1,339,488 tons of  RBD Palmolein (82%) followed by Malaysia of 1,862,315 tons of CPO (34%) and 273,519 tons RBD Palmolein (17%). Thailand is emerging as a regular supplier of crude palm oil to India and supplied 671,345 tons of CPO (12%) and 11,499 tons of RBD Palmolein (1%). In the case of Crude Soybean Degummed Oil; India imported 1,561,864 tons from Argentina (55%) while Brazil is emerging supplier of soybean oil to India and supplied  1,082,644 tons (38%) while for Crude Sunflower Oil, Russia is the leading supplier and supplied 661,191 tons (30%) followed by 447,304 tons from Ukraine (21%) and 301,352 tons from Argentina (14%).

Country-wise Import of Edible Oils Nov.’22 – July ’23 (Qty. in MT)

 Average Prices and Rupee appreciation: (Price in US$/CIF Indian Port/Ton)