India’s palm oil imports reached their highest level in four months in December, led by an uptick in purchases of refined palmolein due to competitive prices, according to a leading trade body’s report on Friday.
Increased purchases by the world’s largest importer of vegetable oils may contribute to a decrease in palm oil stocks in top producers Indonesia and Malaysia, thereby supporting benchmark futures.
The Solvent Extractors’ Association of India (SEA) noted a 2.8% increase in December palm oil imports, totaling 894,186 metric tonnes, while refined palm oil imports surged by 47% to 251,667 tonnes.
The negative refining margin for crude palm oil in India, coupled with the lower prices offered by exporting countries for refined palm oil, made it an attractive option for buyers.
Dealers indicated that the landed cost of refined bleached deodorized (RBD) palmolein at Mumbai port was around $25 per ton less than that of crude palm oil.
Sunflower Oil Imports Double Alongside Palm Oil Rise
Apart from palm oil, the imports of sunflower oil surged by over twofold in December, reaching 260,850 tons, marking the highest volume in three months.
This, coupled with heightened imports of palm oil, resulted in a 12.9% month-on-month increase in India’s overall vegetable oil imports, totaling 1.31 million metric tons.
In December, soyoil imports increased by 1.8% to reach 152,650 tons, albeit considerably lower than the average imports of 306,000 tons in the previous marketing year.
Negative refining margins and a higher premium over rival oils were cited as contributing factors.
“Even in January, we could witness higher imports of refined palm oil because of lower prices. Total palm oil imports could rise above 900,000 tons,” said a Mumbai-based trader.
India predominantly obtains palm oil from Indonesia, Malaysia, and Thailand, whereas soyoil and sunflower oil imports originate from Argentina, Brazil, Russia, and Ukraine.
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