India's Surge in Crude Soyabean Oil Imports Amidst Falling Local Prices

India's crude soyabean oil imports reached a seasonal high in August as local soyabean prices fell below the minimum support price, according to the Solvent Extractors Association (SEA). The SEA suggested increasing import duties on edible oils to support local farmers. Meanwhile, total vegetable oil imports have declined.

India's crude soyabean oil imports soared to a seasonal high of 4,54,639 tonnes in August, against a backdrop of falling local soyabean prices below the minimum support price (MSP), industry body Solvent Extractors Association (SEA) disclosed on Thursday.

SEA reported that August 2023 saw 3,57,890 tonnes of crude soyabean oil imports, with non-palm oils, including soyabean oil, comprising 48% of total vegetable oil imports.

The rise in imports arrives as local soyabean prices dip below the MSP, raising alarms about farmers' incomes with the new crop set to arrive soon. SEA commended government procurement efforts in Madhya Pradesh, Maharashtra, and Karnataka at MSP levels but recommended hiking import duties on crude and refined edible oils by 20-25% to protect local farmers.

''This will ensure remunerative prices for farmers, enabling market forces to pay above MSP and freeing the government from procurement at MSP,'' SEA stated.

In recent months, soyabean ex-mandi prices were Rs 550-600 per quintal below the MSP of Rs 4,892 per quintal, causing farmer unrest. Overall, vegetable oil imports fell to 15.63 lakh tonnes in August from 18.66 lakh tonnes the previous year. Crude sunflower oil imports tumbled by 22.34%, while palm oil imports, making up 52% of the total, dropped by 29.32% compared to last year.

For the first ten months of this oil year, total vegetable oil imports stood at 161.08 lakh tonnes, down 16% from the same period last year. India remains the world's largest importer and consumer of vegetable oils.

(With inputs from agencies.)