Now, price rise in palm oil, trend likely to continue
Rising palm oil prices will be good news to local farmers who are thinking of palm cultivation
Hyderabad: Prices of palm oil are firming up. The price, which till recently was about Rs 100 a litre, is now at Rs 110. The price has increased about ten per cent or so and the trend is likely to continue for some more time.
“The prices of edible oils have first increased to new highs due to the Covid and the Russia-Ukraine spat. Then they have come down due to the Government intervention. Now, price rise is seen in palm oil. Palm oil is selling around Rs 110 a litre from the earlier 100. The prices of sunflower remained in the same range of Rs 150-160 a litre to the consumers,” said P Chandra Shekara Reddy, Senior Vice President (Sales and Marketing), Freedom Healthy Cooking Oils Sales, said about the industry trends.
According to him, there will be some more appreciation in the palm oil prices. Countries producing palm are in favour of exporting finished products instead of crude. This is resulting in higher prices. On the other hand, rising palm oil prices will be good news to local farmers who are thinking of palm cultivation.
According to data from Solvent Extractors’ Association of India (SEA), import of vegetable oils in November this year, the first month of oil year 2022-23, is at a new record of 15.4 lakh tonne, up 11% from 13.9 lakh tonne in October. In November last year, vegetable oil import was 11.7 lakh tonne.
With respect to crude palm oil (CPO), the import in November was 9.31 lakh tonne, the highest ever in a single month. In October, 7.56 lakh tonne CPO was imported. Import of refined, bleached, and deodorised palm oil (RBD ) is rising fast. About 2.02 lakh tonne RBD was imported in November compared to 1.27 lakh tonne in the previous month.
The import of crude soybean oil reduced to 2.29 lakh tonne last month from 3.35 lakh tonne the previous month. Sunflower oil import increased to 1.57 lakh tonne in November compared to 1.44 lakh tonne in October 2022.
According to SEA Executive Director Dr BV Mehta, the current import duty difference of 7.5% between CPO (5%) and RBD (12.5%) encourages import of refined palmolien into our country.
The palmolien imports during the just concluded oil year (Nov 21-Oct 22) have increased 168%. During November 2021, the import of RBD palmolein jumped over two lakh tonne. This import of finished goods is seriously also affecting the capacity utilization of palm refining industry, he said.
The main reason for the rise in palmolien imports is the encouragement given by exporting countries like Malaysia and Indonesia to their industry. They have kept high export duties on crude palm and low export duty on palmolien finished products.
The industry body is in favour of a 15% duty difference between the CPO and RBD palmolein. It wants the Government to raise the import duty on RBD to 20% from the current 12.5%.
This would reduce the refined palmolien imports and the same would be replaced with crude palm oil imports. Overall imports into the country will not be affected and it will have no impact on edible oil inflation, he said in a statement.
