India's palm oil imports dive 27% as price rise dents demand, dealers say
03/09/2024 (Reuters), Mumbai - India's palm oil imports in August fell more than a quarter from a month ago on ample stocks and as negative margins prompted refiners to curtail purchases of the tropical oil, five dealers said on Tuesday.
Lower purchases by the world's biggest importer of vegetable oils could lead to higher stocks of palm oil in key producers Indonesia and Malaysia, weighing on benchmark futures FCPOc3.
Palm oil imports fell 27% in August from the previous month to 791,000 metric tons, according to estimates from dealers.
"In July, imports were substantially higher than local requirements, so refiners curtailed imports this month," said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.
"Furthermore, after the recent price rise in palm oil, it became as expensive as soyoil, providing no incentive to purchase palm oil."
Palm oil typically trades at a discount to soft oils, but it is currently being offered at the same price as competing soft oils for September shipments.
The refining margin flipped to negative territory for palm oil in August, which prompted buyers to curtail purchases, said Rajesh Patel, managing partner at edible oil trader and broker GGN Research.
Soyoil imports in the month jumped 16% to 456,000 metric tons, the highest in more than two years, dealers said.
Over the past month, local rapeseed oil prices have increased by more than 8%, which is prompting some refiners to blend rapeseed oil with comparatively cheaper soyoil, said a Jaipur-based edible oil trader.
Sunflower oil imports fell 21% in August to 288,000 metric tons, dealers said.
The drop in imports of palm oil and sunflower oil brought down the country's total edible oil imports by 17% to 1.53 million tons, as per dealers' estimates.
India is considering an increase in import taxes on vegetable oils to help protect farmers reeling from lower oilseed prices, two government sources said on Wednesday.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
Industry body the Solvent Extractors' Association of India (SEA) is likely to publish its data on August imports by mid-September.