As a result of reduced import tariffs, India’s imports of edible oils—palm, soybean, and sunflower—rose 17% year over year to a record 16.47 million tonne (MT) in the 2022–2023 oil year (November–October), according to the trade association Solvent Extractors Association of India (SEA).
The amount of these cooking oils imported peaked in 2016–17 at 15.1 MT. According to the SEA, “India is now a preferred destination for excess oil supplies due to the (rise in) imports. “However, as a result of muted world prices, the value of edible oil imports fell by 11% to Rs.1.38 trillion in 2022–2023 from a record Rs.1.56 trillion in 2021–2022.
Including refined and crude palm oil, the percentage of total edible oil imports rose to 59% last year from 55% in 2021–2022. The main importers of palm oil are Thailand, Malaysia, and Indonesia.
According to the trade association, the import of refined palm oil, or RBD palmolein, made up more than 25% of all palm oil imports in 2018. This had a major impact on the local refining sector, which is struggling with a severe underutilization of its installed capacity. Sunflower and crude soybean imports were 3 MT and 3.67 MT, respectively, last year. Argentina and Brazil provided the soybean oil, while Russia and Ukraine provided the sunflower oil.
Nearly twenty-four to twenty-five MT of edible oil are consumed annually in India, of which 56% is imported. Among the oils that make up the domestic output share are peanut (7%), soybean (24%), and mustard (40%).
At the moment, imports of crude palm, soybean, and sunflower oil only attract a 10% education cess and a 5% agri-infra cess, for a 5.5% overall tax incidence. October had a 13.73% decrease in retail inflation in the “oil and fats” categories as compared to the prior year.
