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India’s palm oil imports jumped to a six-month high in May, driven by low domestic inventories and a wide price discount to alternatives such as soybean oil and sunflower oil, encouraging refiners to increase purchases, the Solvent Extractors’ Association of India (SEA) said on Thursday.
Higher palm oil and soybean oil imports by India, the world’s largest vegetable oil buyer, could support Malaysian palm oil prices and US soybean oil futures.
The association said palm oil imports rose by 84% in May compared with April, reaching 592,888 metric tonnes, the highest level since November 2024.
India imported an average of more than 750,000 tonnes of palm oil per month during the marketing year that ended in October 2024.
Soybean oil imports also increased by 10.4% to 398,585 tonnes, the highest level since January, while sunflower oil imports rose by 1.9% to 183,555 tonnes.
The increase in palm oil and soybean oil imports lifted India’s total vegetable oil imports in May by 33% from the previous month to 1.19 million tonnes, the highest level since December.
SEA data showed that weak imports between January and April had reduced domestic vegetable oil stocks to 1.33 million tonnes by June 1, the lowest level since July 2020.
Rajesh Patel, managing partner at edible oil trader GGN Research, said palm oil imports are likely to rise further in June and could reach 850,000 tonnes, since palm oil is trading below soybean oil.
Patel added that soybean oil imports in June are likely to remain stable at around 400,000 tonnes.
India buys palm oil mainly from Indonesia and Malaysia, while soybean and sunflower oils are imported from Argentina, Brazil, Russia, and Ukraine.
A New Delhi-based trader said vegetable oil imports are expected to rise in the coming months, supported by the recent customs duty cut that is likely to stimulate demand.
India recently reduced the basic import duty on crude edible oils to 10% in an effort to lower food prices and support the domestic refining sector.