<article><p class="lead">The Indian government's move to lower import duties on palm oil may boost imports by around 1mn t or 12pc in the November 2020-October 2021 oil year compared to previous projections, according to B V Mehta, executive director of the solvent extractors' association of India.</p><p>Combined import volumes of crude palm oil (CPO), crude palm kernel oil and refined bleached deodorized palm olein are likely to total 8.4mn-9mn t during 2020-21, Mehta said at the Indonesian Palm Oil Conference. This up from the 7.5mn-8mn t that he forecast for the period before duties were revised and up to 25pc higher than the 7.22mn t imported in the 2019-2020 oil year. </p><p>Actual purchased volumes will depend on the price spread between soft oils in this highly price-sensitive market, with current inflated price levels likely to shrink demand, Mehta said. Delivered CPO prices rose to $774/t cif India in October from $751/t in September, supported by tighter supplies in Malaysia and Indonesia.</p><p>India late last month <a href="https://direct.argusmedia.com/newsandanalysis/article/2164258">cut palm import duties</a> to 27.5pc from 37.5pc to curb rising food costs</p><p>The Covid-19 pandemic will also weigh heavily on Indian palm oil demand in the coming year as imports are predominantly taken by the catering industry, where social restrictions have hit hardest, Mehta said. </p><p>The Indian government could be forced to change duties again in February to support farmers and ensure domestic oils remain competitive once the rapeseed harvest comes in, said Mehta. Revisions to edible oil duties remain a delicate balancing act for Delhi, which must reconcile the disparate interests of urban consumers and rural oil seed farmers. </p><p>Indian edible oil production is expected to increase by 1.25mn t to 9.79mn t during the 2020-2021 oil year.</p><p class="bylines">By Lauren Moffitt</p></article>
