India’s imports of palm oil in February fell 30% from January to their lowest level in 8 months as refiners decided to reduce their inventories as inventories grew as a result of excessive imports in October-January, five dealers told Reuters on Thursday. The price of palm oil produced in Malaysia could be affected by India’s reduction in imports of the commodity, whose country is the world’s largest importer of vegetable oils. The sum of the five dealers’ estimations indicates that India’s imports of palm oil dropped to 5,86,000 tonnes last month, the lowest level since June 2022.
Rajesh Patel said a managing partner at GGN Research, the country’s imports of palm oil were strong from October to January, but the demand was low, forcing refiners to reduce purchases in February. According to the dealers, imports of sunflower oil fell 67% to 150,000 tonnes in February from record high levels in January, while imports of soy oil decreased 7.3% from January to 340,000 tonnes.
Thailand, Indonesia, and Malaysia are the leading suppliers of palm oil to India. Argentina, Brazil, Russia, and Ukraine are the countries from which it imports soybean and sunflower oil. According to a Mumbai-based dealer with a worldwide trade business, palm oil struggled to compete last month as its price advantage over soy oil and sunflower oil decreased to about $200 per tonne from as much as $500 in the December quarter.
However, Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and advisory firm, suggested that India’s recent decisions to stop duty-free imports of sunflower oil and soy oil could benefit palm oil in the coming months. A duty-free import cap of 2 million tonnes of crude sunflower oil for the upcoming fiscal year beginning on April 1 was eliminated by India on Wednesday. As a result of the change, imports of palm oil, which previously attracted taxes while imports of sunflower oil and soy oil were exempt from taxes due to the limit, may increase.
