India reduced vegetable oil imports by 25% in December

In December, India reduced imports of edible oils by 25% to a 3-month low of 1.19 million tonnes, including sunflower oil by 22% to 265,000 tonnes and palm oil by 40% to a 9-month low of 503,000 tonnes as prices surged, prompting processors to boost purchases of cheaper soybean oil, whose imports rose by 3% to a 4-month high of 420,000 tonnes.

 

A reduction in palm oil imports by India, the world's largest buyer of vegetable oils, could collapse base palm oil prices in Malaysia while supporting soybean oil prices in the United States.

 

Palm oil is usually sold cheaper than soybean and sunflower oil, but a reduction in inventories led to a sharp increase in its prices in November and December, as a result of which Indian importers began to actively buy soybean oil.

 

Currently, palm oil prices are $100/t higher than soybean prices, so Indian buyers will continue to reduce its imports in January, according to brokerage company Sunvin Group.

 

The Indian Solvent Manufacturers Association will release December import data in mid-January.

 

Recall that India buys palm oil mainly from Indonesia, Malaysia, and Thailand, and soybean and sunflower oil from Argentina, Brazil, Ukraine, and the Russian Federation.