India reduced vegetable oil imports by 16% in January, but may increase purchases in February

In January 2025, India reduced its imports of edible oils by 16% to 1 million tonnes compared to December, which was the lowest figure in the last eleven months, Reuters reports.

In particular, palm oil imports fell by 46% to 272 thousand tons (the lowest value since March 2011), while soybean oil imports rose by 4% to a 7-month high of 438 thousand tons, and sunflower oil by 10% to 280 thousand tons.

The decline in palm oil imports is due to its price exceeding that of soybean and sunflower oils. As a result, Indian palm oil processors have become negative-profitable and have reduced purchases. For the first time in a decade, the share of palm oil in India's edible oil imports has fallen below 30%.

The main suppliers of palm oil to India are Indonesia, Malaysia and Thailand, while soybean and sunflower oil are supplied by Argentina, Brazil, Ukraine and the Russian Federation.

Yesterday, on the Dalian stock exchange, on the first working day after the holidays, soybean oil futures rose by 2.97%, and palm oil CPO1 by 3.04%.

April palm oil futures on the Bursa exchange in Malaysia rose 1% in a week to 4,332 ringgit/t or $995/t on forecasts of a reduction in inventories in the country and the resumption of work by Chinese enterprises after the New Year holidays.

March soybean oil futures on the Chicago Board of Trade remained at $991/t (+11% month-on-month), but during the week they rose and fell by 3.3% amid the introduction and postponement of reciprocal tariffs between the US and Canada.

The market is optimistic about India's increased palm oil imports to replenish stocks following rising soybean oil prices and high sunflower oil prices.

According to Trading Economics, the average price of sunflower oil delivered to buyers increased by 1.3% over the week to $1,286/t (+2.7% over the month).

The vegetable oil market will remain under pressure from increased soybean oil supply from Argentina and a record soybean harvest in Brazil. However, renewed demand from India and China in the coming weeks could support sunflower and palm oil prices.