India's edible oil imports dip 3 pc amid squeezed demand
India, the world's largest importer of edible oils, remains heavily reliant on imports to meet consumer demand. In 2023-24, India spent approximately Rs 1.32 lakh crore ($15.96 billion) on edible oil imports
India's edible oil imports declined by 3 percent during the 2023-24 oil marketing year (Nov-Oct). According to the Solvent Extractors’ Association of India (SEA), imports reached 159.6 lakh tons, down from 164.7 lakh tons in the previous year. This dip was attributed to higher edible oil prices, which squeezed the demand, especially among the lower-income segment of society. SEA anticipates that imports may decrease by 10 lakh tons in 2024-25, as the country expects a bumper crop.
India, the world's largest importer of edible oils, remains heavily reliant on imports to meet consumer demand. In 2023-24, India spent approximately Rs 1.32 lakh crore ($15.96 billion) on edible oil imports, marking a 13-fold increase in import costs over the past two decades, alongside a 2.2-fold increase in import volume. In the last five years, edible oil imports have grown from 132 lakh tons in 2019-20 to 159.6 lakh tons in 2023-24.
Domestic Supply Push
With normal monsoon, India’s overall oilseeds production during 2024-25 may go up by 35 lakh tons. The bumper crop is likely to augment the domestic availability and help to reduce the import demand by a Million tons (10.0 lakh tons) in 2024-25, SEA said in a press release. In the oil year 2024-25 (Nov-Oct), edible oils import may at around 150 lakh tons.
Shift in Import Preferences
The SEA report also highlighted changes in the types of edible oils imported. RBD palmolein imports surged to 19.3 lakh tons, up from 4.2 lakh tons five years ago, driven by reduced duty differences between refined and crude oils. This led to an increase in overall palm oil shipments from 72 lakh tons to 90.2 lakh tons in 2023-24.
Crude oil imports have decreased, with slight declines in crude soybean oil and sunflower oil imports. Crude palm oil imports dropped to 69.70 lakh tons in 2023-24 from 75.88 lakh tons in the privious year. Among soft oils, soybean oil imports slightly declined to 34.41 lakh tons from 35.06 lakh tons, while sunflower oil imports increased to 35.06 lakh tons from 30.01 lakh tons.
Refined oil’s share of imports rose from 3 percent to 12 percent over the past five years, while crude oil's share decreased from 97 percent to 88 percent, according to SEA.
Policy Adjustments
Indian government revised import duties on certain edible oils in September 2024, aiming to encourage local production. The minimum support price for oilseeds was also raised to make oilseed farming more attractive for Indian farmers.
SEA identified Indonesia and Malaysia as the primary suppliers of palm oil to India, together contributing over 5 million tons of imports during the year. Global price fluctuations, along with a depreciating rupee, have impacted import costs.
In its push towards self-sufficiency, the Indian government is also promoting domestic palm oil production, targeting an output of 2.8 million tons by 2029-30.
