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Traders said India bought 300,000 tonnes of soybean oil from Argentina on Tuesday and Wednesday, marking the largest such purchase ever made within a two-day span, as buyers took advantage of Buenos Aires' move to scrap export taxes on soybeans and other food products.
The strong purchases will help Argentina draw down its soybean oil stocks, but could also mean lower palm oil shipments from Indonesia and Malaysia to India.
The traders, who declined to be named because the deals were struck by private trading companies, said the soybean oil purchases are for shipment between October and March.
A New Delhi-based trader working for a trading company said the volume bought in this short period was unprecedented, with buyers largely bypassing palm oil.
Argentina temporarily scrapped export taxes on Monday on a range of agricultural commodities, including soybeans, in a bid to speed up overseas sales and bring in much-needed US dollars to shore up its weakening peso.
Traders noted that India, the world's biggest buyer of vegetable oils, typically imports just under 300,000 tonnes of soybean oil a month, and that this week's purchase volume underscores the impact of Argentina's decision.
Traders said the soybean oil was bought at prices ranging between $1,100 and $1,120 a tonne on a cost, insurance and freight (CIF) basis.
"With prices correcting by about $50 after the tax exemption, Indian buyers rushed to purchase, as they found it cheaper than palm oil," one trader said.
India's soybean oil imports fell 25.27% to a four-month low of 367,917 tonnes in August, according to the leading trade body, the Solvent Extractors' Association of India.
India buys palm oil mainly from Indonesia and Malaysia, while it sources soybean oil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
India's total vegetable oil imports rose 4.7% month-on-month in August to 1.62 million tonnes, the highest level since July 2024, as purchases of palm oil and sunflower oil increased.
Demand for edible oils, particularly palm oil, typically rises in India during the festival season due to increased consumption of sweets and fried foods.
Source: The Economic Times