Post lockdown, Indians have practically stopped eating outside. There’s probably no better indicator of that than imports of palm oil, the predominant frying medium used by hotels, restaurants/dhabas, canteens and caterers as well as bread, biscuit, noodles, namkeen and mithai makers.
India’s imports of crude palm oil (CPO) and RBD (refined, bleached and de-odourised) palmolein stood at 3.35 lakh tonnes (lt) in March, a steep 58.2 per cent drop compared to 8.02 lt for the same month of 2019. What is notable, however, is the far less drop in imports of sunflower (from 2.98 lt in March 2019 to 2.97 lt in March 2020) and soyabean oil (from 2.93 lt to 2.92 lt).
“Sunflower, soyabean, mustard, groundnut, coconut and sesame oil is directly used in home kitchens. Palm oil isn’t a consumer-facing oil and you hardly have any big brands. While RBD palmolein is sold through the public distribution system in some states, 90 per cent or more of it is consumed by the hotel and food industry. Since these are now largely shut or operating at low capacity, palm oil consumption has taken a hit. On the other hand, households are continuing to use the other oils and they are also eating more at home,” says B.V. Mehta, executive director of the Solvent Extractors’ Association of India.
The above pattern – of the lockdown affecting HORECA (hotels, restaurants, catering) and B2B (business-to-business) sales more than home consumption – has been seen even in milk, as earlier reported in The Indian Express.
Mehta estimates the country’s annual edible oil consumption at about 230 lt. Out of that, palm oil’s share is at 90 lt, with the balance mainly comprising soyabean (50 lt), mustard (25 lt), sunflower (25 lt), cottonseed (12 lt), rice bran (10 lt), groundnut (5 lt), coconut (2 lt) and sesame (1 lt). Being the cheapest oil and amenable to deep as well as multiple frying, palm oil is ideal for institutional and industrial consumption. Also, being a neutral oil with no aroma, it is used for adulterating other oils, from mustard and groundnut to sesame. This activity, too, is currently at low ebb.
According to Siraj A. Chaudhry, industry expert and a former chairman of Cargill India, the reduction in palm oil imports may also have to do with the Centre, on January 8, placing RBD palmolein on the restricted list.
Import licenses are being issued for import of this oil only from Indonesia, a move seen as retaliation against the top supplier Malaysia for its criticism of India’s abrogation of Article 370 and enactment of the Citizenship Amendment Act. RBD palmolein imports in March were just 30,850 tonnes (down from 3.13 lt in March 2019). While there are no restrictions on CPO imports, even these have fallen from 4.90 lt in March 2019 to 3.04 lt in March 2020.
“After the action against Malaysia, everyone started going slow on palm oil imports from February. When prices, too, started crashing after the novel coronavirus outbreak in China, the inventory losses suffered by the importers added to their uncertainties over shipping and bank lines. And now with no institutional and industrial demand after lockdown, palm oil is feeling the heat,” points out Chaudhry.
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