India increased vegetable oil imports by 19% in December

India increased its vegetable oil imports in December by 19% compared to November to 1.37 million tonnes, the highest level in the last three months. The main reason for the increase was the seasonal increase in supplies of sunflower and soybean oil, while palm oil supplies decreased sharply.

According to traders' estimates, in December, sunflower oil imports increased by 145% compared to November to 350 thousand tons, which was the highest figure in the last 17 months, and soybean oil imports increased by 37% to 508 thousand tons.

At the same time, palm oil imports fell by 2% to an 8-month low of 507,000 tons due to a winter reduction in consumption and a reorientation of processors to alternative types of oils - primarily soybean and sunflower.

A reduction in palm oil imports from India, the world's largest buyer of vegetable oils, could lead to a build-up of inventories in Indonesia and Malaysia, which in turn would put pressure on Malaysian palm oil futures, while the US soybean oil market would receive additional support.

Market participants say seasonality has played a major role in the decline in palm oil demand. Its consumption in India traditionally declines in winter due to its tendency to harden at lower temperatures, which limits its use in the northern regions of the country. At the same time, local oils such as groundnut, soybean and cottonseed oils are becoming more available on the domestic market.

India imports palm oil mainly from Indonesia and Malaysia, while sunflower and soybean oil are imported from Argentina, Brazil, and the Black Sea region, including Ukraine and the Russian Federation. Traders expect palm oil imports to partially recover in January due to price discounts, while purchases of sunflower and soybean oils may decline slightly.