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Indian vegetable oil importers are ramping up palm oil purchases ahead of the festival season as declining global prices make it cost-effective to meet expected demand surge during the festive period, according to the Indian Vegetable Oil Producers' Association (IVPA).
The recent reduction in import duty on crude edible oils to 10 per cent, from 20 per cent, provides "a little bit of relief" for consumers, though prices would have been higher otherwise, IVPA President Sudhakar Desai told PTI in an interview.
The duty cut was reflected in loose oils within two days, but it takes up to 25 days to reflect in packaged oils, he said, and added the IVPA welcomes the government's soon-to-be-notified new regulations on the vegetable oil sector.
The organised sector will not have any issue in implementing it, unlike the unorganised sector.
"Preparations have already started. We see good imports in July. People are buying ahead of festival time. The pipeline was dry in the previous three months and is now filling up due to festival demand," Desai said.
With Durga Puja and other major festivals approaching in early September, edible oil consumption typically spikes as households increase cooking and sweet preparation, making affordable palm oil imports crucial for the domestic market.
Edible oil imports declined by nearly one lakh tonnes over the past six months, but are expected to recover in the next six months. "Overall edible oil imports would be more or less the same as last year," he said.
India imported 16 million tonnes during the 2023-24 oil year ending October.
When asked how the HoReCa sector, (Hotel, Restaurant, and Catering), and brands like Parle which shifted to rice bran oil during high palm oil prices are now adapting to facilitate the shift back to palm oil with prices ruling lower, Desai said, it is "very easy to go back to palm oil," highlighting the commodity's renewed cost competitiveness as alternative oil prices remain elevated.
The IVPA is working to stabilise India's import supply amid challenges from Indonesia's biodiesel mandates and other factors causing volatility in global palm oil prices.
Source: Online/GFMM
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