Going by the prevailing trends, Palm oil imports into India in September 2020 is expected to be in the range of 700-750k.

The festival season is round the corner. The after effects of the prolonged lockdown and continuing restrictions due to the spread of the pandemic points towards a subdued Deepavali.

Domestic oilseeds availability is expected to be good. Due to this the October-Nov-Dec palm imports are being pegged in the range of 600-650K per month.

The pandemic is rapidly spreading in the country causing all round distress. India went through a prolonged phase of lockdown. The gradual unlocking in phases is seeing new cases cropping up with distressing speed. The battered economy cannot afford to have another full-scale lockdown. So, it is expected the Administration will be forced to impose micro lockdowns in pockets with dense proliferation of cases. 

After the surge in imports in July, August saw a sharp dip of 14% in total vegetable oils imports, from 1.59 MMT to 1.37 MMT.

The period from January to August 2020 saw total vegetable oils imports at 8.90 MMT. This was down 15% from 10.52 MMT imported in the corresponding period the previous year.

Total imports decreased by 15% in the January-August 2020 period. But Palm Oil Products imports decreased by 31% to 4.59 MMT during the same period when compared to 6.66 MMT done in the January-July 2019 period.

The most significant drop was in RBD Olein imports, which fell 92% to a mere 163k, from 2,109k in the previous corresponding period. This is due to the direct consequence of the removal of the 5% duty advantage for Malaysian RBD. No import has happened in July and August 2020.

CPO imports increased marginally by 3%. The imports were to the extent of  0.72 MMT in August 2020, against 0.59 MMT in August 2019. The drop in RBDPL imports has been partly offset by increase in CPO imports.

The HORECA sector continues to be battered. There is a noticeable shift in demand pattern from HORECA to domestic household consumption. Here soft oils are the favoured cooking medium. This is weighing on Palm Oil Products imports. Although Palm Oil Products imports have picked up a fair bit, it was still outshone by Soft Oil imports.

Total Palm Oil Products imports in the import basket has decreased from 64% to 52% during this comparative period. Historically, Palm Oil Products have always enjoyed a share in excess of 50%. A point to be noted is this had spiked to close to 80% a few years ago.

In the soft oils’ basket, SFO imports have slowed down significantly. On a year-on-year basis, it increased by 9% to 1.81 MMT. SBO increased by 14% to 2.46 MMT. SBO imports in Aug 2020 were down to 0.39 MMT from the record of 0.48 MMT in July 2020.

The relentless pursuit by the Industry paid off earlier in the year with the imposition of licensing requirements on RBD imports. But the import duty differential between CPO and RBD has eroded to 7.5%. Indian industry continues to fight seeking an increase of this differential to be between 10 to 15%.

With the vaccine for the COVID-19 still not on the horizon, how the industry will vacillate in the near future may not be easy to guess.

Prepared by Bhavna Shah

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