Higher palm oil purchases by India would reduce inventories in producer countries and support benchmark prices. File
| Photo Credit: Reuters

India bought a record amount of edible oils for July delivery, as refiners increased palm oil and soy oil purchases due to lucrative prices and ahead of an anticipated hike in import duties, industry and government sources told Reuters.

Higher palm oil purchases by India, the world’s biggest importer of vegetable oils, will help to reduce inventories in producer countries like Indonesia and Malaysia and support benchmark prices.

Edible oil imports are set to jump to a record 1.92 million metric tons, up nearly 26% from a month ago, according to average estimates from the data shared by trade houses. India on average has been importing 1.2 million tons of edible oil so far in the current marketing year which began November 2023.

Around 1.45 million tons of edible oils have already been discharged at various ports, including 850,000 tons of palm oil, said a government official, who declined to be named as he was not authorised to speak to the media.

Palm oil imports in July are expected to jump 45% from a month ago to 1.14 million metric ton, the highest in 20 months, dealers said.

“Correction in palm oil prices in May and June made it cheaper than rival oils. During this period, the refining margin in India was also healthy, prompting refiners to place orders for July shipments,” said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.

Palm oil’s discount to soy oil widened to more than $100 per ton in May from less than $10 in April, dealers said.

“Expectations of a duty hike in the budget also prompted some buyers to increase purchases for July shipments,” Mr. Bajoria said.

Finance Minister Nirmala Sitharaman presented the Union Budget for the 2024-25 financial year on July 23, although she didn’t make any changes to the duty structure on edible oils.

Soy oil imports up, Sunflower oil imports down

Soy oil imports in July are set to jump 45% from a month ago to 400,000 metric tons, the highest in 13 months, data showed.

Soy oil shipments originating from South America take more than six weeks, and some of the delayed shipments landed in July, which lifted soy oil imports, said Rajesh Patel, managing partner at edible oil trader and broker GGN Research.

Sunflower oil imports could fall to 380,000 tons in July, down 18% from the last month’s record shipments, data showed.

India imports palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soy oil and sunflower oil from Argentina, Brazil, Russia and Ukraine.