The rise in palm oil imports by India, the world’s biggest importer of vegetable oils, could help Malaysia lower its stocks and support palm oil prices, the traders said.
India’s palm oil imports rose to 750,000 tonnes last month, up from 586,007 tonnes imported in February, according to an average of estimates from the dealers.
Palm imports rose in March as the oil traded at a discount of more than $150 to soy oil and sun oil in the previous month and the first half of March, which prompted refiners to increase purchases, said Sandeep Bajoria, chief executive of vegetable oil brokerage Sunvin Group.
Soy oil imports in March fell 27% to 259,000 tonnes, while those of sunflower oil eased 4% to 150,000 tonnes, the lowest in five months, the dealers said.
Imports of soy oil tumbled as the oil’s premium over palm and sun oil has been rising due to a drought in Argentina, said Rajesh Patel, managing partner at GGN Research.
Soybean production in Argentina, the world’s biggest soy oil exporter, could fall to 25 million tonnes in the 2022-2023 crop cycle, down from an initial estimate of 48 million tonnes as a drought curtailed yields. India buys palm oil mainly from Indonesia, Malaysia and Thailand. It imports soybean and sunflower oil from Argentina, Brazil, Russia and Ukraine.
Palm oil imports in April and May are likely to fall as the oil’s discount to rivals has fallen below $70 per tonne from as high as $500 in the December quarter, a Mumbai-based dealer with a global trade house said.
“Refiners are shifting to sun oil. We could see a good amount of sun oil landing in April and May,” the dealer said.