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India could soon see record imports of edible oil of over 16 to 16.5 million tonnes during the current oil year ending October 2023. Historically low rainfall in the month of August, along with other factors, is driving the high demand.
Data compiled by The Solvent Extractors’ Association of India (SEA), released on September 14, 2023, showed the import of edible oil in August 2023 (1,852,115 tonnes) was 35 per cent higher compared to imports in August 2022 (1,375,002 tonnes).
In the ongoing Kharif season, as of September 8, 2023, oilseeds have been sown in 180,000 hectares less compared to the corresponding period in 2022.
Poor rainfall, along with a sharp drop in domestic prices in August, has boosted demand for edible oil, leading to an increase in imports. The imports of vegetable oils (edible and non-edible) in total were reported at 1,866,123 tonnes in August 2023 compared to 1,401,233 tonnes in August 2022, up by 33 per cent.
The overall import of vegetable oils during first 10 months of the oil year 2022-23 (November 22-August 2023) has shown an increase of 24 per cent — 14,121,076 tons in 2022-23, compared to 11,376,226 tonnes during the same period in 2021-22.
“Looking at import of edible oils in the first 10 months at 14.12 million tonnes, it will not be surprising to see record import of over 16 to 16.5 million tonnes during the current oil year ending October 2023,” said BV Mehta, Executive Director, SEA.
India’s highest import till date is 15.1 million tonnes in 2016-17.
Rainfall in August in the country has been the lowest in over a century. The country, which is currently in the El Nino year, received only about 162 millimetres of rainfall in the month, instead of the expected 255 mm — a deficiency of 36 per cent. It was the driest August since 1901 when record-keeping began.
Of the four monsoon months, August usually sees the most amount of rainfall (25.4 centimetre) after July’s 28 cm. This has threatened many Kharif crops and also India’s push for self-reliance in edible oils.
However, in the last week, monsoon rains have brought some relief to standing soybean crops in Madhya Pradesh and certain parts of Maharashtra. Groundnut crop in Gujarat with deficit rain is still facing threat of reduction in yield.
Currently, around 60 per cent of domestic consumption demand is met by imports.
The central government has been pushing for self-reliance in edible oil and decreasing its dependency on imports. Apart from poor monsoon, low duty on crude palm, soybean, and sunflower oils is also driving more imports.
Soybean oil imports rose to 358,000 tonnes compared to 342,000 tonnes in the previous month, while sunflower oil imports increased to 366,000 tonnes, surpassing the 327,000 tonnes reported in the previous month.
“This influx of imports is driven by the current low 5.5 per cent duty on crude palm oil, soybean oil, and sunflower oil, transforming India into a prime destination for excess oil supplies,” said Mehta.