India’s July soyoil imports jump to record on duty free buying-dealers


By Rajendra Jadhav


MUMBAI (Reuters) – India’s soyoil imports in July more than doubled from a month ago to a record high as refiners ramped up purchases to take advantage of New Delhi’s move to allow duty free imports of the vegetable oil to calm all-time high prices, five dealers said.


Higher soyoil purchases by the world’s biggest edible oil importer will support U.S. soyoil prices, but will dent rival palm oil’s share in Indian buying and force Malaysian and Indonesian sellers to offer discounts to regain the market share, trading sources said.


The country’s soyoil imports in July jumped 113% from a month ago to a record 493,000 tonnes, according to the average estimate from five dealers with global trading firms that account for more than 80% of India’s soyoil imports.


“Refiners rushed to buy soyoil after government allocated tariff-rate quota for the imports,” B.V. Mehta, executive director of Solvent Extractors’ Association of India, said.


India in late May allowed duty-free imports of 2 million tonnes each of soyoil and sunflower oil for the current and next fiscal years ending March 31, as part of efforts to keep a lid on local edible oil prices.


Through the end of June, soy oil’s premium over palm oil was less than $150 per tonne, but since palm oil attracts a 5.5% import tax, palm oil was effectively more expensive for Indian buyers, Sandeep Bajoria, chief executive of Sunvin Group, a leading vegetable oil broker, said.


“Then palm oil supply was also limited because of Indonesia’s export restrictions. Buying soyoil was then easy and profitable as well,” he added.


The Solvent Extractors’ Association of India, a Mumbai-based trade body, is likely to publish its import estimate for July in mid-August.


India has also allowed imports of 2 million tonnes of sunflower oil without import taxes, but availability of sun oil has been limited due to shipment disruptions from top exporter Ukraine, said a Mumbai-based dealer with a global trading firm.


Soyoil imports look set to remain robust in the coming months and India could import a record 4.5 million tonnes of soyoil in 2021/23 marketing year ending on October 31, compared to 2.87 million tonnes a year ago, dealers said.


Soyoil usually accounts for a fifth of India’s total vegetable oil imports, but this year its share could rise to one third, dealers said.


India traditionally buys soyoil from Argentina and Brazil, but in the past few months has also made purchases from the United States, Russia and Turkey, said a New-Delhi-based dealer with a global trading firm.


 


(Reporting by Rajendra Jadhav; Editing by Christina Fincher)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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