Lower purchases by the world’s biggest importer of vegetable oils could lead to higher stocks of palm oil in key producers Indonesia and Malaysia, weighing on benchmark futures.
Palm oil imports fell 34% in September from the previous month to 530,000 metric tons, according to estimates from dealers.
“Palm oil became more expensive than soybean oil and sunflower oil last month. Simultaneously, India increased import duties, prompting some refiners to cancel contracts,” said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.
Palm oil typically trades at a discount to soft oils, but it is currently being offered at a premium over the soft oils for October shipments.
In mid-September, India raised the basic import tax on crude and refined edible oils by 20 percentage points. Soyoil imports in September fell 15% from a month ago to 388,000 metric tons, while sunflower oil imports plunged 49% to 145,000 metric tons, the lowest in 10 months, dealers said. The drop in imports of palm oil, soyoil and sunflower oil brought down the country’s total edible oil imports by 31% to 1.06 million tons, as per dealers’ estimates.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
Industry body the Solvent Extractors’ Association of India (SEA) is likely to publish its data on September imports by mid-October.
“Palm oil imports are likely to improve in October because of festive season. We could see shipments of more than 750,000 tons,” said a Mumbai-based dealer with a global trade house.