USDA: India’s vegetable imports likely to reach record  16.5 million tonnes in 2022-23

According to the US Department of Agriculture (USDA), India is likely to import a record 16.5 million tonnes (mt) of vegetable oil in 2022-23. In its September report, World Markets and Trade,” the USDA said India’s imports include nearly 10 million tons of palm oil. In addition, sunflower oil imports have reached an unprecedented level, because large quantities of this high-quality oil are  offered at a discount from the Black Sea region. 

 Replenishment of stocks 

 While consumption of vegetable oils  recovered this marketing year, recent high volumes of oil imports will also help replenish India’s supplies and support growing demand during the festival season in the coming months. Solvent Extractors’ Association of India (SEA) managing director BV Mehta, who considered 16.5 million tonnes of imports  a reasonable estimate,  told Business Line that he would not be surprised if shipments cross that range. In September and October, the range could be around 2.5 million tonnes more adding that India had already imported around 14 million tonnes till August. The country  imported 13.1 million tonnes in 2016-17, which was  an all-time record. According to him, he will break all previous records in the 2022-23 season. 

 Lowering of prices 

  Sudhakar Desai, president of the Indian Vegetable Oil Producers Association (IVPA), said USDA estimates that vegetable oil consumption has recovered due to a sharp drop in  prices compared to last year. Import of around 4,00,000-5,00,000 tonnes  in August  led to further rally in Indian stocks. Consumption growth in the country was around 6-7 percent after the stagnation of demand due to high prices in the previous two years, Since the share of refined olein has increased to about 30 percent in the palm import basket, the IVPA recommends increasing the tariff differential between crude palm oil and refined oils to prevent excessive imports. Desai said the surge in imports of refined palm oil has seriously hurt the domestic refining industry. 

 Not affected by El Nino  

 According to the USDA report, India’s imports are expected to fall to 14.6 million tonnes in the new marketing year 2023-24 due to exceptionally high oil supplies expected at the end of this season.  The report also expected higher transportation supplies to help ease uncertainty about El Nino’s impact on domestic and Southeast Asian oil production. “Ending inventories at the end of 2023-24 are forecast to decline year-on-year due to increased consumption, but  remain high”, Agreeing to this, Mehta said that India’s imports will decline in 2023-24 as the country has a huge inventory. Normally, the country has about 2 million tons in reserve for  next year. However, this year it could rise to 3.5 million tons.

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