Robust Palm Oil Buying To Propel India's July Edible Oil Imports To Record High: Report
24/07/2024 (ABP News) - Indian industries and the government have reportedly made unprecedented purchases of edible oils scheduled for delivery in July. Refiners have significantly boosted their procurement of palm oil and soy oil, driven by attractive pricing and in anticipation of potential import duty hikes, according to a Reuters report citing sources.
Increased purchases of palm oil by India are expected to decrease stockpiles in leading producers Indonesia and Malaysia, thereby supporting benchmark prices. It is noteworthy that India is the world's largest importer of vegetable oils.
Based on estimates from trade houses, imports of edible oils are anticipated to surge to a record 1.92 million metric tons, marking a nearly 26 per cent rise from the previous month. India has imported an average of 1.2 million tons of edible oil since the start of the current marketing year in November 2023.
According to an unnamed government official, approximately 1.45 million tons of edible oils, including 850,000 tons of palm oil, have already been unloaded at different ports. The official declined to be named due to a lack of authorisation to speak to the media.
Dealers anticipate that palm oil imports in July will surge by 45 per cent compared to the previous month, reaching 1.14 million metric tons, the highest volume in 20 months. "Correction in palm oil prices in May and June made it cheaper than rival oils. During this period, the refining margin in India was also healthy, prompting refiners to place orders for July shipments," said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage, reported Reuters.
Dealers noted that the discount of palm oil compared to soy oil widened to over $100 per ton in May, a stark increase from less than $10 in April.
According to Bajoria, "Expectations of a duty hike in the budget also prompted some buyers to increase purchases for July shipments."
Finance Minister Nirmala Sitharaman presented the budget for the 2024-25 financial year on Tuesday, maintaining the existing duty structure on edible oils without making any changes.
According to data, soy oil imports are expected to increase significantly in July, rising by 45 per cent compared to the previous month to reach 400,000 metric tons. This marks the highest volume recorded in the past 13 months.
As per the data, sunflower oil imports are projected to decline to 380,000 tons in July, representing an 18 per cent decrease from the record shipments of the previous month.
India primarily sources palm oil from Indonesia, Malaysia, and Thailand, while soy and sunflower oil are imported from Argentina, Brazil, Russia, and Ukraine.