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India’s palm oil imports fell in January to their lowest level in nearly 14 years, as manufacturers shifted to cheaper soybean oil due to negative refining margins for palm oil, a leading trade body said on Wednesday.
Lower palm oil imports by India, the world’s largest vegetable oil importer, are likely to weigh on benchmark Malaysian palm oil prices while supporting US soybean oil futures.
Palm oil imports fell by 45% from December to 275,241 metric tonnes in January, the lowest level since March 2011, according to the Solvent Extractors’ Association of India (SEA).
India imported an average of more than 750,000 tonnes of palm oil per month during the marketing year that ended in October 2024, according to SEA.
Palm oil usually trades at a discount to soybean oil and sunflower oil, but low inventories pushed its prices above competing oils that were available in larger volumes.
Soybean oil imports rose by 5.6% in January to 444,026 tonnes, the highest level in seven months, while sunflower oil imports increased by 8.9% to 288,284 tonnes.
Lower palm oil shipments reduced India’s total vegetable oil imports in January by 14.8% to 1 million tonnes, the lowest level in 11 months.
Lower vegetable oil imports in recent months also reduced stocks to 2.18 million tonnes at the start of February, the lowest level since April 2022, according to SEA.
Rajesh Patel, managing partner at edible oil trader GGN Research, said palm oil imports may rise slightly in February from January’s low level, but will remain below normal.
He added that soybean oil imports may decline in February, while sunflower oil imports may rise slightly.
India imports palm oil mainly from Indonesia, Malaysia, and Thailand, while soybean oil and sunflower oil are sourced from Argentina, Brazil, Russia, and Ukraine.
Source: Reuters