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India's edible oil imports in July are expected to jump to a record 1.86 million tonnes, nearly 60% higher than normal, as refiners ramp up purchases to build festival stocks amid uncertainty over supplies of the Black Sea, traders and cargo inspectors said on Tuesday.
Higher purchases from the world's biggest importer of vegetable oils could help Malaysia and Indonesia draw down palm oil inventories and support benchmark futures, which are trading near their highest level in 4-1/2 months.
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The scenario would also support soybean futures and help major Black Sea sunflower oil-producing countries draw down stocks.
Around 1.5 million tonnes of edible oils were unloaded at various Indian ports in the first 24 days of July and another 386,000 tonnes are expected to be unloaded in the remaining seven days, totaling 1.86 million tonnes, according to average estimates from dealers and cargo inspectors.
India's average monthly edible oil imports in the 2021/22 marketing year were 1.17 million tonnes, according to trade body Solvent Extractors Association of India (SEA). In June, India imported 1.3 million tonnes of edible oils.
“Importers are keeping a good volume available due to the Russia-Ukraine crisis and do not want to run out of oil at all,” said Rajesh Patel, managing partner at GGN Research, an edible oil broker and trader.
A year-old agreement allowing the safe export of Ukrainian grain to the Black Sea expired last week after Russia withdrew from the initiative and warned it could not guarantee the safety of ships, in a move the UN said would “give a blow to people in need everywhere.”
The Black Sea region is responsible for 60% of global sunflower oil production and 76% of exports.
In 2022, prices for all edible oils reached record highs after supplies of sunflower oil from the Black Sea region were disrupted following Russia's invasion of Ukraine.
The improvement in refining margins has also led refiners to increase purchases ahead of the festive season when demand usually rises, said a New Delhi-based trader with a global trading house.
“July imports are extraordinarily high for all edible oils. Typically, when palm oil imports increase, soybean and sunflower oil imports decrease and vice versa. However, this month, imports of all edible oils are rising,” he said.
Palm oil imports in July are expected to jump 46% from the previous month to 1 million tonnes, the highest in seven months, according to traders' average estimate.
Sunflower oil imports could double from the previous month to 385,000 tonnes, the highest in six months, while soybean oil imports could rise to 475,000 tonnes, the highest in a year, traders 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.
Source: Rajendra Jadhav | Notícias Agrícolas
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