In last one year, C&F prices of edible oils in India have gone down by 3% to 17% due to more abundant global supply, and at the same time Indian rupee depreciated nearly more than 5% in one year and reached INR 70 per dollar, and due to which advantage of cheap veg oil supply has nullified the opportunity for Indian importers.
C&F RBD palm olein, Aug month average prices declined by 16% from last year, same CPO prices fell by 17% from 2017, and SBO prices dropped by 14%, and SFO prices have declined by 6% from Aug’17.
Historically, palm oil contains significant share in Indian veg oil imports, currently landed cost of RBD palm olein and CPO mostly less or same which in encouraging the substantial import in RBD olein more compared to CPO and current high import duty is not at all helping domestic refiners in the country.
Latest data from the SEA (Solvent extractors association), CPO and SBO imports increased by 12% and 22% in July compared to previous month June 2018, while SFO imports stay lower (down by 37%) on month on the basis, mostly reflecting price spreads that continue to favour imports of these two.
While weakness in the Indian rupee which could make imports expensive for local buyers in India, which is hurting palm oil export and other veg oils demand. The rupee fell to a record low of more than 70 per dollar in last week.
India palm/ veg oil demand is expected to resume ahead of festive demand and any recovery in currency may also encourage imports in coming days.