MARKET DEVELOPMENT
Surge in Demand Steadies Soy Oil
Surge in Demand Steadies Soy Oil
11/10/2016 (The Australian) - Indians are acquiring a strong taste for soybean oil thanks to lower prices, fuelling a surge in imports at a helpful time for a glutted global market.
India’s imports of soybean oil have quadrupled in the past five years to more than four million metric tonnes this year, according to data compiled by the country’s vegetable oils industry body.
Imports could rise over the next 10 years by as much as 40 per cent, the US Department of Agriculture estimated in May.
Soybean oil, produced by crushing soybeans, is used in everything from cooking oil to cookies and lipstick. In India, it is favoured for cooking samosas, dosas and curries, but the relatively high price was a deterrent for many consumers. India’s gross domestic product per capita grew 6.9 per cent from a year earlier to $US6200 ($8162) in 2015, but remained much lower than Australia’s $US47,400 with GDP per capita of $US55,800, according to US estimates.
India dethroned China two years ago as the world’s largest importer of soy oil. Some Indian consumers who have switched to soy oil cited the steep drop in prices — 35 per cent since 2012. Prices of palm oil, its main rival, have mostly moved sideways.
“Demand from India will certainly play a role in absorbing excess soy-oil supplies,” said Vamsi Krishna Kona, a trader at Inditrade Derivatives & Commodities, but India’s soaking up some glut isn’t likely to help lift global prices. “Even though India is importing in large quantities, it will not be sufficient to make a strong movement in prices,” he added.
Soybean and palm oil, the two cheapest vegetable oils in international markets, often compete to grab a share in the global market, so their prices often move together. The two oils account for about 68 per cent of the global vegetable-oil trading volume, with soy oil constituting about 24 per cent of the total volume.
India’s imports of soybean oil have quadrupled in the past five years to more than four million metric tonnes this year, according to data compiled by the country’s vegetable oils industry body.
Imports could rise over the next 10 years by as much as 40 per cent, the US Department of Agriculture estimated in May.
Soybean oil, produced by crushing soybeans, is used in everything from cooking oil to cookies and lipstick. In India, it is favoured for cooking samosas, dosas and curries, but the relatively high price was a deterrent for many consumers. India’s gross domestic product per capita grew 6.9 per cent from a year earlier to $US6200 ($8162) in 2015, but remained much lower than Australia’s $US47,400 with GDP per capita of $US55,800, according to US estimates.
India dethroned China two years ago as the world’s largest importer of soy oil. Some Indian consumers who have switched to soy oil cited the steep drop in prices — 35 per cent since 2012. Prices of palm oil, its main rival, have mostly moved sideways.
“Demand from India will certainly play a role in absorbing excess soy-oil supplies,” said Vamsi Krishna Kona, a trader at Inditrade Derivatives & Commodities, but India’s soaking up some glut isn’t likely to help lift global prices. “Even though India is importing in large quantities, it will not be sufficient to make a strong movement in prices,” he added.
Soybean and palm oil, the two cheapest vegetable oils in international markets, often compete to grab a share in the global market, so their prices often move together. The two oils account for about 68 per cent of the global vegetable-oil trading volume, with soy oil constituting about 24 per cent of the total volume.