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MUMBAI, March 14 (Reuters) - India’s imports of refined palm oil more than tripled in February from a year ago as a tax change by top exporter Indonesia made refined products more attractive and the trend could continue unless New Delhi steps in with counter measures.
The share of refined palm oil in total palm oil imports in February rose to 46 percent from just 22 percent a month ago as the impact of the tax took hold, data released by the Solvent Extractors’ Association of India (SEA) showed on Wednesday.
The world’s top vegetable oils importer bought 304,048 tonnes refined palm oil from overseas in February compared with 89,849 tonnes a year ago.
Indonesia altered taxes on exports to make its refined palm oils more attractive than crude palm oil from October 2011 to promote its own refining industry.
The statement said the premium of refined palm oil over crude palm oil has come down to $30 per tonne, compared with some $90 in November 2011, the beginning of the oil marketing year.
“The situation is likely to continue unless the government of India takes some corrective steps, including change of tariff value and raising import duty on refined oils,” said B.V. Mehta, executive director of the trade body in a statement .
Total palm oil imports -- the bulk of India’s edible oil purchases -- rose 79 percent in February to 665,251 tonnes.
India’s total vegetable oil imports -- which include small amount of non-edible oils -- were 875,649 tonnes, up 59 percent from a year earlier and higher than expectations in a Reuters survey, the data showed.
Soyoil imports fell 39 percent to 78,537 tonnes during the month, while overseas sunflower oil purchases jumped nearly two fold to 111,300 tonnes on a year earlier due to lower prices, the data showed.
“Sunflower is the preferred oil in India over soyoil. Sunflower oil always used to have a premium of $70-80 over soyoil but in February it is cheaper by $40,” said Mehta.
Soft oils like soyoil and sunflower oil are preferred during the winter wedding season when traditional feasts are cooked as they do not solidify like palm oil. Sunflower oil has become cheaper than soyoil because of increased supplies this year.
India buys mainly palm oil from Indonesia and Malaysia and a small quantity of soyoil from Argentina and Brazil.
Mehta expects the share of refined oil in total edible oil imports to increase as the pricing gap between crude and refined oil has further reduced.
A Reuters survey had forecast average vegetable oil imports of 843,833 tonnes in February.
The country’s vegetable oil imports in the first four months of the marketing year ending in October 2012 rose by 13.63 percent to 3.06 million tonnes.
India’s edible oil imports in 2011/12 are likely to rise by 6.3 percent to 8.9 million tonnes and all the additional imports will be refined palm oil after Indonesia changed export taxes, a senior Indian industry official said in January. (Reporting by Meenakshi Sharma and Rajendra Jadhav; Editing by Jo Winterbottom)