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Refined palm imports from Indonesia rising

Refined palm imports from Indonesia rising

Indonesian and Malaysian palm oil refiners are growing at the expense of Indian refining units, thanks to lower duty on refined palm oil (RBD olein) exports since 2011. The inverted duty structure is incentivising those countries to export refined palm over crude palm oil (CPO). This means not only is India importing more RBD olein, it also has begun importing stearin, a by-product of CPO fractionation.

Atul Chaturvedi, CEO, Adani Wilmar, maker of the Fortune brand of oil, feels the way out to protecting the industry is by widening the duty difference between CPO and olein from the present 7.5%. This will not only reduce the financial stress on local refining units operating at just 35-40% capacity utilisation for palm but also cut imports of stearin, used by the oleo chemical industry to produce soaps, glycerine, etc. The government, much to the dismay of the edible oil industry, last month retained the 7.5% duty difference after cutting duty on CPO to 7.5% from 12.5% earlier and on RBD olein to 15% from 20%. Its aim was to reduce inflationary expectations on oils before the festive season.

However, Adani’s Chaturvedi, who is also president of industry body Solvent Extractors’ Association (SEA), claims inflationary expectations would be offset by increased capacity utilisation of refining units who would import more of CPO if the duty difference was widened. This would ensure that enough refined palm was available in the market and cap price rise for fear of shortages.

Indonesia levies $30 per tonne on export of RBD and $50 per tonne on CPO. Malaysia charges a duty of 6.5% on CPO and zero on RBD. “The industry is equal to the task of meeting demand for RBD olein…..it’s imperative to restore the financial health to refining units by doubling the duty difference which will also result in saving forex by manufacturing stearin here,” said Chaturvedi.

He added that the industry would be making a representation to the government to increase the duty difference shortly.

SEA pegs that CPO and RBD olein accounted for an average 67% of the total imports of vegetable oils in the four oil years (Nov-Oct) through 2015-16 (10 months). Interestingly, the share of refined palm oils as proportion of total palm oil imports has increased from 16.75% in 2010-11, when the export duty was reduced on olein, to 32% in the 10 months of the current oil year.

(Source – http://www.blackseagrain.net/novosti/refined-palm-imports-from-indonesia-rising)

Refined palm imports from Indonesia rising Reviewed by on . Indonesian and Malaysian palm oil refiners are growing at the expense of Indian refining units, thanks to lower duty on refined palm oil (RBD olein) exports sin Indonesian and Malaysian palm oil refiners are growing at the expense of Indian refining units, thanks to lower duty on refined palm oil (RBD olein) exports sin Rating: 0
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