India’s palm oil imports set to hit 6-year low

mumbai — India’s palm oil imports are likely to fall 15 per cent in 2017/18 from the year before to their lowest in six years, hit by a hike in import taxes, a weaker rupee and tighter credit for would-be buyers, a senior industry official told Reuters.

Reduced purchases by the world’s top importer of the oil, where it is widely used to fry foods such as samosas or bhajis, could pile more pressure on benchmark international futures that are already trading near their lowest in three years.

“Local prices moved up due to higher import tax and depreciation in the rupee. The price rise moderated demand for imports,” said B.V. Mehta, executive director of the Solvent Extractors’ Association of India (SEA).

India in March raised its import tax on refined palm oil to 54 per cent to support local farmers. That made palm cargoes less appealing than shipments of alternative edible oils such as soyoil, sunflower oil and canola oil — at least until import duties on those commodities were raised to 45 per cent in June. For more than three months palm lost its competitiveness in Indian markets relative to other oils due to the higher duty, said Sandeep Bajoria, chief executive of the Sunvin Group, a Mumbai-based vegetable oil importer. —

Prices moved up due to higher import tax and depreciation in the rupee B.V. Mehta, executive director, SEA