New Delhi (Agency): India’s edible oil imports for the month of August have risen to an all-time high of 1.85 million metric tons, marking a notable 5% increase compared to previous months. This surge in imports has been driven by refiners who have purchased more than 1 million tons of palm oil for the second consecutive month, strategically building up stocks in anticipation of upcoming festivals.
The substantial rise in purchases by India, the world’s largest importer of vegetable oils, could potentially have a positive impact on palm oil stocks in major producing countries like Indonesia and Malaysia. Furthermore, the increased demand for edible oils has supported benchmark futures. This trend could potentially lead to a reduction in inventories in regions that produce sunflower oil, such as countries situated around the Black Sea.
During the 2021/22 marketing year, India’s average monthly imports of edible oil were recorded at 1.17 million tons, as reported by the Solvent Extractors’ Association of India (SEA). In the preceding month of July, India’s imports of edible oil reached 1.76 million tons, also marking a record high.
Specifically, palm oil imports for India have risen from 1.09 million tons in July to 1.12 million tons in August, marking the highest level in nine months, according to average estimates provided by dealers.
The SEA is expected to release its official data on vegetable oil imports for August sometime in mid-September. According to industry experts, refiners engaged in aggressive buying in preparation for the upcoming festival season, contributing to the surge in imports. While retail demand remained moderate, the industry anticipates an increase in demand over the coming months.
Notably, imports of sunflower oil have experienced a significant increase of 11.5% compared to the previous month, reaching 365,000 tons. This marks the highest level in seven months. Additionally, soyoil imports rose by 3.7% to 355,000 tons, as estimated by dealers.
As the price difference between palm oil, soyoil, and sunflower oil continues to widen, refiners have opted to increase their purchases, anticipating heightened demand during the upcoming festival period. India primarily sources palm oil from countries like Indonesia, Malaysia, and Thailand, while soyoil and sunflower oil imports come from nations like Argentina, Brazil, Russia, and Ukraine.
The surge in August imports can also be attributed to logistical challenges, with some vessels initially scheduled for unloading in July at the Kandla port eventually offloaded in August due to port congestion. Additionally, concerns over local soybean and groundnut production resulting from dry weather conditions have prompted refiners to import more edible oils. India experienced its driest August in over a century, with the country receiving 36% less rainfall than normal during the month.
