To the imports India’s palm oil imports in January fell to their lowest level in nearly 14 years. That was as refiners switched to cheaper soybean oil instead. The shift was prompted by negative refining margins on the oil, the information was provided by five traders.
Reduced palm oil imports by India, the world's biggest buyer of vegetable oils, could weigh on benchmark Malaysian palm oil prices but support U.S. soybean oil futures.
Significant drop in palm oil imports
Oil imports fell 46% in January from the previous month to 272,000 tonnes, the lowest since March 2011, according to dealer estimates.
India imported an average of more than 750,000 tonnes of the oil every month in the marketing year ending October 2024, according to the Solvent Extractors Association of India. The association is due to publish its January import data in mid-February.
Reuters reported last month that palm oil imports would fall to a multi-year low in January as refiners shifted purchases to soybean oil.
Soybean oil imports in January rose 4% from the previous month to 438,000 tonnes. That was the highest volume recorded in seven months. Sunflower oil imports grew 9.5% to 290,000 tonnes, according to traders.
Impact on the edible oil market
Lower palm shipments reduced the country's total edible oil imports in January by 15.6% to 1 million tonnes, the lowest in 11 months, according to traders' estimates.
Negative palm oil margins have been prevalent for Indian refiners over the past month, discouraging them from making overseas purchases, Rajesh Patel, managing partner at GGN Research, an edible oil trader, said.
Traders typically sell palm oil at a discount to soybean and sunflower oil. However, falling stocks have pushed its prices above rival oils, which are in plentiful supply.
Palm oil usually accounts for more than half of India’s total edible oil imports. However, its share has fallen to less than 30% for the first time in over a decade, Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage, said.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while importing soybean and sunflower oil from Argentina, Brazil, Russia and Ukraine.
Source: Rajendra Jadhav | Notícias Agrícolas
