India’s palm oil imports in November jumped nearly 23% from the previous month to hit their highest in three months as refiners preferred the tropical oil over rival soyoil and sunflower oil due to steep discounts, a leading trade body said on Friday.
Higher purchases by the world’s biggest importer of vegetable oils could help lower palm oil stocks in top producers Indonesia and Malaysia and support benchmark futures.
India’s palm oil imports in November rose 22.8% from the previous month to 869,491 metric tons, the Mumbai-based Solvent Extractors’ Association of India (SEA) said in a statement.
Imports of soyoil increased 10.8% to 149,894 tons and those of sunflower oil fell 16.3% to a 17-month low of 128,707 tons.
Higher palm oil imports lifted India’s total vegetable oil imports in November by nearly 13% from the month before to 1.16 million tons, the association said.
In November, palm oil’s discounts to soyoil and sunflower oil widened, prompting buyers to increase palm oil usage, said a Mumbai-based trader.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
Domestic stocks of vegetable oil fell to 2.96 million tons by Dec. 1 from 3.14 million tons a month earlier, the SEA data showed.
Imports of soyoil in the past two months were well below normal levels, but they’re expected to rise in December due to increased competitiveness following the recent price drop, said a New-Delhi-based dealer with a global trade house.
“Palm oil imports are expected to decrease in December as its discount compared to soyoil has reduced in the last few days. Additionally, due to winter, refiners will purchase less,” the dealer said.
India’s palm oil imports usually moderate during winter months as the tropical oil solidifies at lower temperatures.