Indian domestic refineries are affected due to rising imports of refined edible oil import. India gets more profit by importing refined edible oil than crude oil import and local refining. Solely for this reason, the prices of India’s refined edible oil imports are growing steadily and it will double up to be the highest ever import in Nov15-Oct16 (current oil year). Local Refineries will be hitted badly by this.
As per an analysis prepared by the Solvent Extractors’ Association (SEA), Refined oil imports in India (refined, bleached and diodised or RBD palmolein) were just 1.25 million tonnes Nov14-Aug15 and have touched 2.19 million tonnes in Nov 15-Aug16. The import value of RBD palmolein is high of 2.23 million tonnes in 2012-13.
The increase in the import of RBD palmolein will affect to the local refineries and they may suffer. For increasing the oil crushing and refining capacity, the local refineries have put a lot of money. 50% was unused for many years, Out of the 25 million tonnes oil refining capacity of India. As CPO and RBD made local refining unfeasible, so there is the difference in price.
in the first 10-month of the oil year 2015-16, Our average monthly import of RBD stands at around 200,000 tonnes. Supposing that the same pattern carries in the remaining two months ending, our overall import of RBD would achieve 2.5 million tonnes, a new record exceeding the past one set with 2.23 million tonnes in 2012-13,” said by B V Mehta, Executive Director of SEA.
The country is depending for 55-60% on imports for meeting edible oil demand as Crop growth of oilseeds is less in India. From Indonesia, Malaysia and Argentina, Edible oil for India is mainly imported.
Because of increasing population and rise in middle-class income, the demand has growth of 500,000 tonnes per year but Local production of edible oil is tuck at 6.5-7.5 million. Currently, 23.5 million tonnes is the Total edible oil consumption of the country.
In India’s import of vegetable oil (both refined and crude oil), A small increase of 4% has been seen. In terms of quantity, The imports increased from 11.57 million metric tonnes in the Nov14 – Aug15 to 12.04 million tonnes during Nov15 – Aug16. Like the previous year, The total vegetable oil import is anticipated to be 14.5 million tonnes which are almost same.
For increasing shipment of refined product, $50 a tonne export duty on CPO and at $30 a tonne duty on RBD put by The Indonesian state . Government of Malaysia has levies of 6.5 percent on CPO export and RBD is free from obligation.