Palm oil imports in India slumped by 30% in April to a 14-month record low according to the Solvent Extractors’ Association of India (SEA), Reuters has reported.
The development is said to have prompted a shift by buyers to rival soft oils – sunflower oil and soyoil.
The big drop in palm oil imports by India, the world’s biggest importer of vegetable oils, could weigh on palm oil prices, which are trading near a seven-month low.
It will also likely make it difficult for top producer Indonesia to increase exports after easing restrictions imposed on the shipments earlier this year, traders said.
India’s palm oil imports fell to 510,094 tonnes last month, from 728,530 tonnes in March, the Mumbai-based Solvent Extractors’ Association of India (SEA) said in a statement.
The average monthly imports in the first five months of the 2022/23 marketing year that started on Nov. 1 were 879,000 tonnes, according to the SEA.
Buyers in southern India were replacing palm oil with sunflower oil, which was trading at a steep discount to the tropical oil, said a New-Delhi-based dealer with a global trade house.
Sunoil usually commands a premium over palm oil and was trading at a premium of as high as $500 per tonne in 2022.
Sunoil imports in April surged 68% from a month ago to 249,122 00 tonnes, while soyoil imports edged up 1.4% to 262,455 tonnes, the dealer said.
“This trend will continue even in May. This month sunoil was trading at a discount of as high as $50 per tonne,” he said.
India’s total vegetable oil imports in April fell 10.4% to 1.05 million tonnes, the trade body said.
India, on Thursday, clarified that duty-free imports of soyoil and sunflower oil shipped before March 31 would be allowed until the end of June after hundreds of thousands of cargoes were stuck at ports over confusion over import rules.
This will increase the availability of soyoil and sunoil in May and June and prompt buyers to curtail palm oil purchases, said a Mumbai-based trader.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soy oil and sunflower oil from Argentina, Brazil, Russia and Ukraine.