Higher purchases by the world’s biggest importer of vegetable oils could help to lower palm oil stocks in Indonesia and Malaysia and support benchmark futures.The buying could reduce inventories in sunflower oil-producing Black Sea countries.
Palm oil imports stood at 9.79 million metric tons in 2022/23 marketing year ended on Oct. 31, while sunflower oil imports rose to 3 million tons, Mumbai-based Solvent Extractors’ Association of India (SEA) said in a statement.
Soyoil imports in the year fell 12% to 3.68 million tons as for most of the months it was trading at a premium over palm oil and sunflower oil.
Total edible oil import in the year surged to a record 16.47 million tons, up 17.4% from a year ago, as the government’s move to cut the import tax on edible oils to 5.5% encouraged overseas buying, the SEA said.
The government reduced import taxes when edible oil prices were rising in the world market last year, but it did not raise them after prices fell, said a New Delhi-based dealer with a global trade house.
“The price correction in the world market, coupled with lower duties, made edible oil cheaper and boosted consumption,” the dealer said.
Higher imports lifted vegetable oil stocks to 3.3 million tons on Nov. 1 from 2.46 million tons a year ago, the SEA said.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
Indian refiners were buying aggressively during November to January and July to September as prices were attractive in the world market, but they slashed imports in October because of higher stocks, said Rajesh Patel, managing partner at edible oil trader and broker GGN Research.
The country’s palm oil imports in October fell 15% from a month ago to 708,706 tons, the lowest in 4 months, the SEA said.
Soyoil imports in October slumped 62% from September to 135,325 tons, the lowest in 34 months. Sunflower oil dropped 49% to 153,780 tons, the lowest in 7 months, it said.