India’s palm oil imports in January plunged to their lowest level in nearly 14 years as refiners replaced the tropical oil with cheaper rival soyoil because of negative refining margins for palm oil, five dealers said.
Lower palm oil imports by India, the world’s biggest buyer of vegetable oils, could weigh on benchmark Malaysian palm oil prices, but support U.S. soyoil futures.
Palm oil imports plunged 46% in January from the previous month to 272,000 metric tons, the lowest since March 2011, according to estimates from dealers.
India imported an average of more than 750,000 tons of palm oil every month in the marketing year that ended in October 2024, says trade body the Solvent Extractors’ Association of India, which is set to publish its January import data by mid-February.
Reuters reported last month that palm oil imports would sink to a multi-year low in January as refiners were shifting to soyoil.
Soyoil imports in January rose 4% from a month earlier to 438,000 metric tons, the highest in seven months, while sunflower oil imports jumped 9.5% to 290,000 metric tons, dealers said.
Lower shipments of palm oil brought down the country’s total edible oil imports in January by 15.6% to 1 million tons, the lowest in 11 months, according to dealers’ estimates.
Negative margins for palm oil prevailed for Indian refiners last month, which discouraged them from making overseas purchases, said Rajesh Patel, managing partner at GGN Research, an edible oil trader.
Palm oil usually trades at a discount to soyoil and sunflower oil, but falling stocks have lifted its prices above rival oils, whose supplies are abundant.
Palm oil traditionally accounts for more than half of India’s total edible oil imports, but its share fell below 30% for the first time in more than a decade, said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
