India's palm oil imports rose 12.3% year on year to 811,700 mt in December, the latest Solvent Extractors' Association of India update showed Tuesday.
Palm imports by the world's top buyer stood at 722,857 mt in December 2017. India imported 670,244 mt of crude palm oil (CPO) in December, up 10.2% on year.
Imports of Refined, Bleached and Deodorized (RBD) palmolein rose 22% year on year to 130,459 mt in December.
India also imported a small quantity of crude palm kernel oil last month.
Imports of RBD palmolein would rise in coming months due to the recent reduction of the duty difference with the crude palm oil, said B.V. Mehta, Executive Director of the Mumbai-based trade and industry body for edible oils.
India cut import duties on crude and RBD palmolein from Malaysia and Indonesia to comply with preferential trade agreements with Southeast Asian nations.
The reduction in import duties became effective from January 1, 2019.
The duty on CPO from Malaysia, Indonesia and other members of ASEAN was reduced to 40% from 44%, while the duty on refined palm oil was slashed to 45% from 54% for imports from Malaysia, and to 50% for imports from Indonesia.
With the latest changes, the effective difference in duties between CPO and RBD palmolein shrank to 5.5% from 11%.
In December and January, Indian buyers had already begun to buy more Malaysian palmolein cargoes, said market sources, with less buying from Indonesia. Meanwhile, Chinese buyers are buying more Indonesian palm oil, which is cheaper for them to purchase, sources said.
The duty differential between Malaysian and Indonesian palm imports into India will even out in 2020, said Indonesian sources, so Malaysia may only have the advantage on pricing for the maximum of one year.
India, the world's leading vegetable oil importer, imports mainly palm oil from Malaysia and Indonesia; and soyoil from Brazil and Argentina.
SOFT OIL IMPORTS
Mehta said the duty changes would promote Indian import demand for palm oil at the expense of soft oils.
The preferential rate would put Malaysian in a position to gain market share from Indonesia, Mehta added.
In December, India imported 235,824 mt of sunflower oil, almost the same as the previous year level.
Soyoil imports rose 7.8% year on year to 85,404 mt in December, the SEA data showed.
