POINTERS: Impact of Import Policy & Tax Restructuring on Palm Oil Imports in 2021 in India

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Questions & Answers (5) :

HCLeow

3 years ago

Hi Mr Gupta, How is the cooking oil demand from HoReCa sector? When do you expect the demand to go back to pre-COVID level? The reduction of import duty seems not very successful to control to domestic selling price, what are the other potential measures likely to be taken by Government of India to reduce the cooking oil price ? The high palm oil imports by India in September, in your view driven by the rush to get palm oil before the initial deadline (30 Sep 21) or driven by demand? Sustainable? Thank you.

Vipin Gupta:
Hi As per industry estimates nearly 25% of eatries have closed and many office have not started canteen yet. We think it will take atleast a year after we return to normal life for demand to be fully on track. Other reason is also large section of people living alone in Metros have gone to home and hence demand for HORECA is low.
2 years ago

Clarence Tee

3 years ago

Your figure shows that India import large volume of CPO to refine. Behind that there is a large amount of stearin produced. As India is not known for exports of large quantity stearin, may I know where is stearin used in your country. Can you also provide commentary on your country’s RBD stearin market. Is your country short of stearin? Is there huge opportunities for Malaysian exporters to export stearin to your country.

Vipin Gupta:
Stearine is used mainly for soap and Oleochemical and some bit in edible products like Vanaspati( Hydrogenated fats) and bakery products. Currently India does import Stearine when CPO refining is low else we are sufficient in stearine.
2 years ago

Ng Ivy

3 years ago

Hi Mr Gupta, Would it be more profitable for India refiners to be involved in oilseeds crushing, refine palm oil or import and sell refined palm oil in India currently? Will the current high global edible oil prices improve farmers income and alleviate their debt burden

Ankit Gupta:
Yes, why not ? India is a huge market of edible oils and refiners have the reach to every nook and corner of the country. The more they have margins on one particular oil the more they will expand its presence and focus on the growth of turnover. Present high oil prices will definitely increase farmers income and reduce their debt burden. Farmers have always been under the debt burden and the present high prices will help them come out of it.
3 years ago

Vipin Gupta:
Hi There is very different setup for crushing which in hinterland and port based refining with some overlap. So port based refineries would continue to import. At current duties its tough to get margins on CPO import and refining. Curent prices augur well for Indian farmers, they had good income in Mustard and now soybean is also looking promising though not as much as farmers would have anticipating while sowing.
2 years ago

George Teh

3 years ago

Dear Mr Gupta What is your assessment of the potential impacts of the Government of India (GOI) plans to massively expand domestic palm oil plantation and production capacity at the the Andaman and Nicobar Islands? Thank you.

Ankit Gupta:
The acceptance of palm oil in India will go up a lot. Palm kernel oil being processed into super foods and other important products will get more presence and acceptance. People do not know about palm kernel oil and it’s health benefits. People need to know about the same and start using the super foods derived from that in their daily routine.
3 years ago

George Teh:
Dear Mr Gupta Thanks for the reply, albeit circuitous. On the question of Palm Kernel Oil, what is your assessment of the price premium acceptable to average Indian consumers? Is benchmarking of PKO health benefits to say, olive oil or other commonly-perceived "healthy" oil, a sensible marketing strategy? Thank you.
3 years ago

Vipin Gupta:
As association we think its a very positive step and details look very promising, this should really help India increase self sufficiency in edible oil. As shared in one of the webinars by Mr Niyogi from GAVL, the oil palm plantations in India are carbo positive so its a very good signs for India.
2 years ago

Nur Sophia

3 years ago

At the current crude and refined palm oil import tax difference of 11%, the current CPO price higher and if not near to RBD palm olein price and the need for pay for refining cost of between USD40-USD50 per MT, it would appear that it is not worthwhile for the refiners in your country to import CPO to refine. Yet importing RBD palm olein in the Indian market is not picking up. Can you explain. The other thing about the Indian market is that the business platform for refining looks quite volatile due to the way import tax is handle. In view of the business risk that refiners has to undertake, your country has invested substantially and has build up a big refining business. How do you explain India’s situation from this angle. How does the palm oil players in your country handle the volatility.

Ankit Gupta:
Continuous business and supply in the indian market is only given by the refiners. In spite of making a loss they give consistent supply to meet the demands of the country. Most of the Traders only come in when there is a margin. Erratic supply is not appreciated by the markets and the deep growth of that particular oil gets hurt
3 years ago

Vipin Gupta:
Current duty are indeed in favor of olein but we do need some stearine and for many applications where quality and freshness are important imported olein do not meet the parameters and hence olein demand will be capped at certain level. Obviously this % will change basis the price differential on landed basis.
2 years ago