India's edible oil imports fell to their lowest level in four years in February. The decline was driven mainly by declines in purchases of soy oil it's from sunflower. As a result, inventories hit a three-year low, a leading industry body said on Tuesday.
Furthermore, imports remained below normal for the second consecutive month, contributing to the depletion of inventories in the world’s largest buyer of vegetable oils. Consequently, this situation may force India to increase its purchases in the coming months. This is expected to have a positive impact on Malaysian palm oil prices as well as U.S. soybean oil futures.
Increase in palm oil imports
The country's palm oil imports last month rose 35.7% from January to 373,549 tonnes, the Solvent Extractors Association of India (SEA) said in a statement.
India imported an average of more than 750,000 tonnes of palm oil every month in the marketing year ending October 2024, according to the SEA.
Reduction in stocks and outlook for March
Soybean oil imports, in turn, decreased by 36% in February, totaling 283,737 tons. Meanwhile, sunflower oil imports fell by 20.8%, reaching 228,275 tons. These data were released by the SEA, evidencing a downward trend.
As a result, the reduction in soybean oil and sunflower oil shipments impacted the country's total vegetable oil imports. Last month, the total imported volume fell by 12%, reaching 899,565 tons. In fact, this is the lowest value recorded since February 2021, according to SEA.
Edible oil inventories in India also saw a significant decline. Compared to the previous month, the decline was 14%, resulting in an inventory of 1.87 million tonnes as on March 1. Consequently, this is the lowest level in the last three years.
India sources palm oil mainly from Indonesia, Malaysia and Thailand, while soybean oil and sunflower oil are imported from countries such as Argentina, Brazil, Russia and Ukraine.
Expectations for March indicate a possible increase in imports of palm oil and soybean oil. According to Rajesh Patel, managing partner at GGN Research, an edible oils trading company, the industry has been struggling to replenish stocks.
Palm oil’s share of total vegetable oil imports has also fallen significantly. In the first four months of the current marketing year, which ends in October 2025, its share fell to 43%. In the same period last year, palm oil’s share was 66%, SEA reported.
Source: Rajendra Jadhav, Anjana Anil and Rahul Paswan | Notícias Agrícolas
