Datetime: 2025-07-18 08:51:18 Visit: 6996
India has reduced import tariffs on crude palm oil, soybean oil and sunflower seeds from 20% to 10% since May 31, and the effective tax rate has dropped from 27.5% to 16.5%. This move has significantly stimulated palm oil demand. The specific performance is as follows:
Import volume has increased significantly: After the tariff adjustment, India's palm oil imports have increased significantly. India's palm oil imports reached 600,000 tons in May 2025, an increase of 87% from 321,000 tons in April, the highest since November 2024. June is expected to be 750,000 tons as inventories fall to low levels and importers accelerate replenishment. In July, as refinery capacity utilization increases, imports may hit a new high.
The proportion of crude oil imports has increased: The tariff adjustment has increased the proportion of crude palm oil imports. In April, the proportion of crude palm oil imports was 50%, and it rose to 65% in May. At the same time, the import volume of refined oil fell by 18% year-on-year, and importers preferred to import crude palm oil to take advantage of the tariff difference to obtain higher profits.
Increased profits for refineries: The reduction in tariffs on crude palm oil has increased the profit of Indian refineries processing crude palm oil from US$30 per ton to US$80 per ton. This has attracted companies to invest in expanding production. From January to May 2025, refineries in Gujarat, Andhra Pradesh and other places added about 500,000 tons/year of production capacity, further promoting the import demand for crude palm oil.
Driven by biodiesel demand: Crude palm oil is the main raw material for biodiesel, accounting for 70% of the production cost of biodiesel. The tariff reduction has reduced the cost of refineries and increased their production enthusiasm. India's biodiesel blending target in 2025 is B20, which is expected to consume about 2.5 million tons of crude palm oil. After the tariff adjustment, the profit margin of refineries will expand, which may drive the actual blending ratio to exceed the target, thereby increasing the demand for crude palm oil.
