India's palm oil imports hit a six-month high in May as lower stocks and a price discount tropical oil in relation to competitors soy oil it's from sunflower prompted refiners to increase their purchases, according to five traders.
Rising imports of palm oil and soybean oil by India, the world's largest buyer of vegetable oils, could support Malaysian palm oil prices and U.S. soybean oil futures.
Palm oil imports in May rose 87% from the previous month to reach 600,000 tonnes, the highest since November 2024, according to dealer estimates.
India imported, on average, more than 750,000 tonnes of palm oil per month during the marketing year ending October 2024, according to the Solvent Extractors Association of India, which is due to publish its May import data in mid-June.
Low inventories and discounts boost demand
Palm oil imports fell sharply from January to April due to the product’s premium over soybean oil, which led to lower inventory levels in India, said Rajesh Patel, managing partner at GGN Research, an edible oils trader.
“Since palm oil started being sold at a discount last month, Indian buyers have started reconsidering its use. They have slowly switched back to palm oil,” Patel said.
India's vegetable oil stockpiles fell to 1.35 million tonnes on May 1, the lowest level recorded since July 2020, according to the SEA.
General increase in imports of vegetable oils
Soybean oil imports in May rose 10% from the previous month to 398,000 tonnes, the highest since January, traders said. Sunflower oil imports, meanwhile, rose 2% to 184,000 tonnes.
Rising imports of palm oil and soybean oil pushed India's total edible oil imports in May up 37% from the previous month to 1.18 million tonnes, the highest since December, according to traders' estimates.
India has halved the basic import duty on crude edible oils, setting the new rate at 10%. The move was announced on Friday. The move is aimed at reducing food prices while helping the local refining sector.
India buys palm oil mainly from Indonesia and Malaysia. Countries like Argentina and Brazil export soybean oil to India. Sunflower oil, on the other hand, comes mainly from Russia and Ukraine.
Source: Rajendra Jadhav | Notícias Agrícolas
