India has increased the import duty on vegetable oils, which will increase the pressure on their quotations

The Indian government has increased the basic duty on crude palm, soybean and sunflower oil from 0% to 20%, and on refined palm, soybean and sunflower oil from 12.5% to 32.5%.

The move should support oilseed farmers, especially in Maharashtra and Madhya Pradesh, and boost oil exports.

Now the effective (full) duty on crude palm, soybean and sunflower oil will increase from 5.5% to 27.5%, and on refined oil - from 13.75% to 35.75%, which will greatly limit oil imports in the near future, especially sunflower, which has risen significantly in price.

Asian markets had a day off yesterday, so palm oil prices will only react to the new rules today. On Friday, October palm oil futures on Bursa fell 0.55% to 3,831 ringgit/t or $888/t (-1.7% for the week).

In August, the import of edible oils to India decreased by 17% compared to July to 1.53 million tons, in particular palm oil - by 27% to 791 thousand tons, sunflower oil - by 21% to 288 thousand tons, while soybean oil - increased by 16 % to the 2-year maximum – 456 thousand tons.

Soybean oil prices are currently the lowest compared to other oils, so palm oil sellers will have to cut prices heavily to keep supplies high.

December soybean oil futures on the Chicago Stock Exchange fell 1.3% to $864/t during the week (0% for the month, -43% for the year), but rose slightly yesterday amid lower US inventories.

According to the NOPA association, in August the volume of soybean processing in the US decreased by 13.8% compared to July to 4.3 million tons, which was 8.5% lower than traders' expectations. As a result, stocks of soybean oil decreased by 24.07% to the lowest level (for this month) since 2017 of 516.6 thousand tons, which is 8.92% lower than last year's figure.

According to Economics, for the week the average price of sunflower oil with delivery to buyers increased by 11.8% to $1,057/t, but on the physical market of the Black Sea the price is $920-940/t FOB.

A decrease in the sunflower harvest in Ukraine and the Russian Federation will reduce the supply of sunflower oil, but the higher price compared to other oils will limit demand, especially given the significant supply of soybean and canola oil.

According to the Brazilian Association of Vegetable Oil Producers (Abiove), the intentions of the country's authorities to increase the processing of soybeans into biodiesel from 31 million tons in 2024 to 55.8 million tons in 2025 will sharply limit soybean exports, which will strongly affect global quotations in the second half of the season .