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India's palm oil imports in May are expected to fall to the lowest level in 27 months as the rare premium seen against other edible oils prompted buyers to cancel cargoes and replace them with soybean and sunflower oil , dealers and cargo inspectors said on Tuesday.
The surprising drop in palm oil imports by India, the world's largest buyer of vegetable oils, could drive down palm oil prices. Malaysia and Indonesia, the two largest global producers, may reduce the value of their palm oil supplies to regain market share from other edible oils.
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The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange fell 1.85% to 3,365 ringgit a tonne after Reuters reported the drop in Indian imports.
Around 261,000 tonnes of palm oil were unloaded at various Indian ports in the first 20 days of May and another 150,000 tonnes are expected to be unloaded in the remaining 11 days, totaling 411,000 tonnes, according to average estimates from dealers and shipping agencies.
India's monthly average palm oil imports in the first six months of the 2022/23 marketing year, starting November 1, was 818,203 tonnes, according to trade body Solvent Extractors' Association of India (SEA).
“Palm oil has been replaced by sunflower oil in many parts of the country due to the price competitiveness of sunflower oil,” said Rajesh Patel, managing partner at GGN Research.
In April, Indian buyers chose to cancel large quantities of palm oil purchases for the first time in many years and the industry expected May imports to fall to 700,000 tonnes.
Price-sensitive Asian buyers have traditionally trusted palm oil because of its low cost and fast shipping times. But palm oil has traded at a premium to other edible oils at the same time that light oil prices have fallen, in part because of a record rapeseed crop.
Palm oil's discount to rival oils reached $500 per tonne in the December quarter, but the product began trading at a premium earlier this year as production in Indonesia and Malaysia was reduced by rain. excessive.
Palm oil traditionally accounts for about two-thirds of India's vegetable oil imports, offering competitive prices, but its share fell to about 40% in May, said a New Delhi-based trader with a global trading house.
May sunflower oil imports are expected to jump 28% from the previous month to 319,000 tonnes, while soybean oil imports could rise 16% to 305,000 tonnes, according to traders' average estimate.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soybean oil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
“Palm oil prices will fall more than light oils in the coming months to attract buyers,” the trader said.
Source: Rajendra Jadhav | Notícias Agrícolas
