Lang
India's soybean oil imports are expected to jump 60% year-on-year to a record in 2024/2025, with plant buyers stepping up purchases as soybean oil prices fall below those of rival palm oil, whose shipments are expected to drop to a five-year low, according to six traders who spoke to Reuters.
The rise in soybean oil purchases by India, the world's biggest importer of edible oils, will support global soybean oil prices, which have climbed 31% since the start of the year, while weighing on Malaysian palm oil futures.
During the 2024/2025 marketing year, which ends in October, soybean oil imports are likely to rise to 5.5 million tonnes, up from 3.44 million tonnes a year earlier, according to trader estimates. By contrast, palm oil imports are expected to fall 13.5% to 7.8 million tonnes, the lowest level since 2019/2020. Sunflower oil imports could also drop 20% to 2.8 million tonnes, a three-year low.
The surge in soybean oil imports is expected to lift India's total edible oil imports by 1% to 16.1 million tonnes, traders estimate.
B.V. Mehta, executive director of the Solvent Extractors' Association of India, said palm oil trading at a premium to soybean oil for several months this year had prompted buyers to switch to soybean oil. "Soyoil was cheap and plentiful, so it captured palm oil's market share," he added.
Crude palm oil had earlier this year commanded a premium of up to $150 a tonne over crude soybean oil, owing to tight supplies in producing countries such as Malaysia and Indonesia.
India, where consumers have traditionally favoured palm oil for its low cost, has seen palm oil prices rise, prompting even large industrial buyers to seek alternatives, according to Ashish Acharya, vice president at Patanjali Foods Ltd, one of the country's biggest edible oil importers.
While soybean oil was initially bought as a substitute for palm oil, it has also started replacing rapeseed (canola) oil, whose price has risen over the past two months, according to a Mumbai-based trader at a global trading firm.
India mainly imports palm oil from Indonesia and Malaysia, while it typically sources soybean oil and sunflower oil from Argentina, Brazil, Russia and Ukraine. This year, however, India is likely to import more than 600,000 tonnes of soybean oil from Nepal, according to a New Delhi-based trader.
The trader noted that soybean oil shipments from Nepal are exempt from customs duty under the South Asian Free Trade Agreement, encouraging buyers in eastern India to turn to the Nepalese market.
Source: Reuters