Indian Importers Shifts from Higher Imports of CPO to RBD Palm Olein

Crude palm oil imports are being replaced by imports of final product, RBD Palm olein due to its cheaper rates. In the current Marketing year 2021-22, RBD Palm olein imports for the period of Nov’21-Mar-22 stands at 7.71 lakh tons compared to 0.24 Lakh tons last year. 

Source: SEA

Indonesia has charged higher duty on exports of CPO compared to its processed products. Indonesia in late November 2021, had announced to lower imports of CPO and promote exports of final and by-products of Palm. Indonesia and Malaysia are taking these steps to encourage their local refinaries. However, large import of edible palm oil and lower prices compared to CPO would lead to price disparity and reduced capacity utilization of Indian Palm oil refiners.

Solvant Extractor Association of India has brought the matter into the notice of Government of India and has suggested to increase the duty difference between CPO and Refined Palmolein/Palm Oil to at least 15%. At present effective duty on CPO stands at 5.5% and Refined Palmolein/Palm Oil duty stands at 13.75%, making a difference of 8.25%.