India’s palm oil imports jumped 29 per cent in November from a month ago, as a steep discount to rival soyoil and sunoil made buying of the tropical oil lucrative for local refiners, five dealers told Reuters on Tuesday.
Higher imports by India, the world’s biggest palm oil buyer, would help top producer Indonesia cut its inventories and support benchmark Malaysian palm oil prices, which have nearly halved from this year’s record highs.
India’s palm oil imports reached 1.14 million tonnes last month, the average estimate from five dealers with trading firms showed. In November 2021, India had imported 539,639 tonnes of palm oil.
“Palm import increased because it is the cheapest oil right now compared to other oils,” said Rajesh Patel, managing partner at GGN Research.
For November shipments, buyers mostly placed orders in October, when palm oil was nearly $500 per tonne cheaper than rival soyoil and sunflower oil as Indonesia was trying to reduce its stockpile, dealers said.
Even in December, palm oil imports would remain around 1 million tonnes, but could falter from January onwards as palm oil’s discount to soyoil has been narrowing over the past few weeks, said a Mumbai-based dealer with a global trading firm.
Crude palm oil is being offered at $1,015 a tonne, including cost, insurance and freight (CIF), in India for January shipments, versus $1,280 for crude soyoil, the dealers said.
India’s palm oil imports usually moderate during winter months as the tropical oil solidifies at lower temperatures.
But this year, the imports were high at the beginning of the winter in November because of higher discounts, the Mumbai-based dealer said.
Soyoil imports in November fell 36 per cent from a month earlier to 215,00 tonnes, while those of sunflower oil rose 10 per cent to 160,000 tonnes, the dealers said.
The Solvent Extractors’ Association of India, a trade body based in Mumbai, is likely to publish its November import data in the middle of December.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.