India’s soybean oil imports surged to a record 601,000 tonnes in August, rising 21% from the previous month as refiners stepped up purchases to build inventories ahead of the country’s peak festive season. The increase came alongside stronger palm oil imports, while sunflower oil shipments fell sharply amid supply disruptions.
India, the world’s largest importer of vegetable oils, imported an estimated 1.54 million tonnes of edible oils in August, up 4% month-on-month and the highest level in 11 months, according to estimates from five industry dealers. The surge was largely driven by higher purchases of soyoil and palm oil as refiners prepared for stronger consumption during the September-November festival period.
Soyoil replaces sunflower oil
Soyoil has become an increasingly important alternative as supplies of sunflower oil from the Black Sea region have been disrupted by the Russia-Ukraine conflict. Earlier estimates had suggested August soyoil imports could reach around 620,000 tonnes, reflecting strong buying by Indian refiners.
Actual August imports were estimated at 601,000 tonnes, while sunflower oil shipments fell 38% month-on-month to 157,000 tonnes, a six-month low. Delays and disruptions affecting Black Sea shipments have encouraged Indian buyers to switch to alternative vegetable oils.
The price relationship between soyoil and competing oils has also supported the shift. Competitive soyoil prices, combined with supply uncertainty for sunflower oil, have made soybean oil more attractive to Indian refiners.
Palm oil imports also rise
Palm oil imports increased 7% from July to 780,000 tonnes, the highest monthly volume in six months. The stronger buying of both palm and soyoil reflects refiners’ efforts to secure adequate supplies ahead of the festive season, when demand for edible oils typically increases.
The increase in Indian purchases could also have an impact on global vegetable-oil markets. Higher demand from India may help major producers such as Indonesia, Malaysia and Argentina reduce inventories while providing support to benchmark palm oil and soyoil prices.
Nepal shipments add to supplies
The August estimates do not include duty-free edible oil shipments entering India by land from neighbouring Nepal. Dealers estimated that around 100,000 tonnes of edible oils, including approximately 90,000 tonnes of soyoil, arrived from Nepal during the month.
The Solvent Extractors’ Association of India (SEA) is expected to release its official August import figures in mid-September, which will provide a more comprehensive assessment of the country’s edible-oil purchases.
The record soyoil imports highlight the changing dynamics of India’s edible-oil market. With refiners building stocks for the festive season and continuing disruptions to sunflower oil supplies, soybean oil is likely to remain a key component of India’s import basket in the near term.