India’s palm oil imports surged to a four-month high in May, rising by 11.6% compared to April. The increase, driven by the commodity’s competitive pricing against rival oils, is likely to support Malaysian palm oil futures.
India’s palm oil imports in May reached the highest level in four months, with a significant 11.6% increase compared to April, according to the Solvent Extractors’ Association of India (SEA). This surge is attributed to palm oil’s more favourable pricing compared to other vegetable oils, making it an attractive option for Indian buyers.
Key Highlights:
- Import Statistics: In May, India imported 763,300 metric tons of palm oil, marking the highest import volume since January.
- Vegetable Oil Import Trends: While palm oil imports rose, soyoil imports decreased by 16% to 324,016 tons. Conversely, sunflower oil imports saw a substantial increase of 75%, reaching 410,727 tons. Overall, India’s total vegetable oil imports rose by 16% to 1.5 million tons in May.
- Market Impact: The higher imports could bolster the benchmark Malaysian palm oil futures, providing support to the market.
Price Dynamics: The rise in palm oil imports is primarily driven by its competitive pricing. Crude palm oil was offered at approximately $951 per metric ton in India last month, inclusive of cost, insurance, and freight. In comparison, soyoil and sunflower oil were priced around $1,000 and $987 per ton, respectively.
Market Analysis: “Palm oil’s price stability has made it a preferable choice for Indian buyers amid rising costs of other vegetable oils,” stated B.V. Mehta, executive director of the SEA. He noted that disruptions in the supply chains of major soyoil producers like Argentina and Brazil, coupled with declining sunflower oil supplies from the Black Sea region, have driven up the prices of these oils.
A Mumbai-based dealer with a global trade house commented, “With the widening discount on palm oil, it’s likely that India could purchase over 750,000 tons in June. Soyoil imports may fall below 300,000 tons due to recent price hikes.”
Import Sources: India primarily sources its palm oil from Indonesia, Malaysia, and Thailand, while soyoil and sunflower oil are imported from Argentina, Brazil, Russia, and Ukraine.
Outlook: As palm oil remains competitively priced, Indian imports are expected to remain strong, potentially influencing global market trends and supporting palm oil prices in the coming months.