The stock of imported edible oils in pipelines as well as on ports fell to the lowest level in the past several years. As against the average stock in pipeline for 30 day consumption, the beginning of this month saw the stock fall to a level sufficient only for 22 days.
According to data from the Solvent Extractors’ Association of India (SEA), the stock of edible oils as on January 1, 2020, at various ports fell to an estimated 860,000 tonnes (a fifth of this is refined palm oil). In the last four months, the stock in pipelines is drying up. The total stock at ports and in pipelines is reported at 1.36 million tonnes, down 9 per cent month-on-month and by a third from the year ago level of 2.03 million tonnes. India’s monthly requirement is about 1.9 million tonnes. In May 2019, the stock in pipelines and at ports was 2.36 million tonnes.
“Palm oil prices have increased very sharply which has increased cost. Domestic prices are generally higher due to huge crop damages in crops like soyabean. At high price, consumption has also been impacted,” said B V Mehta, Executive Director, SEA.
From January onwards, refined (RBD) palmoil and palmolein imports have been placed under "restricted list" to regulate excessive imports of refined palm oil into India. India largely imports RBD palmolien from Malaysia. The imports will now be subjected to a license, to be issued by DGFT. SEA has proposed a monthly cap of 50,000 tonnes only for this if DGFT issues licenses for import.
However, because imports from Malaysia have been stopped, buyers have started paying around $10 premium to buy Indonesian palmoil.