India increased sunflower oil imports by almost 12% in August

Falling prices and a possible crop failure in the country are increasing India's demand for vegetable oils. In August, it increased their import to 1.87 million tons, which is 33% higher than in August 2022, the Manufacturers Association of India (SEA) reports.

A sharp drop in the prices of vegetable oils against the background of increased demand, caused by a possible disruption of supplies due to the closure of the grain agreement and forecasts of a reduction in the own harvest of oilseeds due to insufficient monsoon rains, led to a significant increase in the import of vegetable oils to the country.

According to SEA data, in FY 2022/23 (November-August), import of vegetable oils to India increased by 24% compared to the same period of the previous season to 14.12 million tons and may reach a record 16-16.5 million tons, while the previous record was 15.1 million tons in FY 2016/17.

Thus, compared to July, the import of palm oil (which takes a larger share in the supply of vegetable oils) grew by 4% from 1.09 to 1.13 million tons, which is 13.7% higher than in August 2022. At the same time, the import of soybean oil grew by 4.56% from 342.27 to 357.89 thousand tons (244.697 thousand tons in July 2022), and sunflower - by 12% from 327.259 to 365.87 thousand tons (135.308 thousand tons in July 2022).

In FY 2022/23, Brazil and the Russian Federation became the main suppliers of soybean and sunflower oil to India, while previously they were Argentina and Ukraine. So, in August, deliveries of sunflower oil from the Russian Federation increased compared to August last year from 72.78 to 160.572 thousand tons, and soybean oil from Brazil - from 67.75 to 130.968 thousand tons.

According to SEA, stocks of vegetable oils, particularly in ports and pipelines, reached a record 3.74 million tons on September 1, compared to 3.28 million tons on August 1. Of these, palm oil reserves amounted to 1.46 million tons, soybean oil – 383 thousand tons, unrefined sunflower oil – 296 thousand tons.

SEA experts attribute the increase in imports to a low duty of 5.5% on crude palm, soybean and sunflower oil, which makes India a major oil market.

In August, the average price for crude palm oil in Indian ports on a CIF basis was $924/t, for crude soybean oil – $1,056/t, and for crude sunflower oil – $1,078/t.

Platts, part of S&P Global Commodity Insights, estimates CFR West Coast India crude palm oil at $874/t on September 13, down 7.1% from late August.