India sharply increased imports of vegetable oils in May, but mostly cheap palm oil, so world prices did not receive support

According to SEA, as of May 1, vegetable oil stocks in India decreased to the lowest level since July 2020 at 1.35 million tons due to a reduction in imports in the January-April period amid a sharp increase in palm oil prices.

In May, the country increased imports of vegetable edible oils by 37% compared to April to a 6-month high of 1.18 million tonnes, in particular sunflower oil – by 2% to 184 thousand tonnes, soybean oil – by 10% to a 5-month high of 398 thousand tonnes, palm oil – by 87% to a six-month high of 600 thousand tonnes, as its price was lower than the prices of soybean and sunflower oils. Processors increased purchases, which supported palm oil prices in Malaysia.

According to surveyors AmSpec Agri Malaysia and Intertek Testing Services, exports of palm oil products from Malaysia grew by only 13.2-17.9% in May, indicating increased competition from Indonesia in the Indian market.

July palm oil futures on the Bursa exchange in Malaysia rose only 2% in the month to 3,950 ringgit/t or $930/t amid rising production and falling global oil prices.

Increased soybean oil supplies from South America continue to push down soybean oil prices, with July futures for which in Chicago falling by 4.2% to $1,030/t in a month, while the price of soybean oil FOB in Brazil for June delivery is $1,038/t (-2.6% in a month).

According to Oleoscope, the price of Russian sunflower oil increased by 1.8% to $1,110/t FOB in the month, while in Ukraine, export demand prices for sunflower oil in Black Sea ports fell by 1% to $1,110/t in the month, as sunflower oil prices in India remain at $1,200/t CIF Mumbai for delivery in June.

In late May, India halved the basic import duty on crude edible oils to 10% to support its own industry and lower food prices. This will boost purchases but not support oil prices from palm oil exporters Indonesia and Malaysia and soybean or sunflower oil from Argentina, Brazil, Ukraine and the Russian Federation.