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Informist, Thursday, Apr. 3, 2025

 

Anjali Lavania

 

MUMBAI – India's palm oil imports have increased to 423,000-425,000 tonnes in March from 265,600 tonnes a month ago, according to estimates of experts, marking a reversal of the earlier trend of decline since August. In February, crude palm oil import fell 26% on year to a four-month low, according to the data by the Solvent Extractors' Association of India. 

 

With high import volumes of palm oil and soyoil, India's vegetable oil import during March is estimated to have risen 10% to 971,000 tonnes, as per GGN Research estimates.

 

Palm oil imports are estimated to have reached a three-month high during March, said Rajesh G. Patel, managing partner of GGN Research.

 

Imports of palm oil had been falling since August, according to the data by the Solvent Extractors' Association of India. "The high price premium on palm oil has reduced both imports and consumption in recent months, leading to a sharp increase in the combined consumption of soybean oil and sunflower oil," the association said in a release.

 

Palm oil prices gained during earlier months due to lower production in Malaysia on account of unfavourable weather conditions and ageing of palm trees. Production of crude palm oil in Malaysia fell 4.2% on month to 1.18 million tonnes in February, according to preliminary data from the Malaysian Palm Oil Board. Indonesia, another major producer, adopted a programme of using palm oil for blending with fuel.

 

"Normally palm oil prices remain low compared to other oils, but due to low production in countries like Malaysia and Indonesia's B40 programme, palm oil traded at premium during previous months," said Chayan Soni, commodity research analyst at Suguna Foods Pvt. Ltd.

 

However, production in Malaysia is reportedly rising, as workers return to plantations after the Ramadan break, thus weighing on prices, Dow Jones said, cited Kenanga Futures in a note on Thursday.

 

"Over the last six months, Indian palm oil imports have experienced a notable trend reversal closely linked to market expectations and price fluctuations. This decline coincided with elevated palm oil prices, prompting importers to scale back their purchases to avoid high procurement costs. However, as market sentiment shifted and expectations of price stabilisation emerged, import volumes began to recover," said Sivakumar Ramjee, executive director-Indirect Tax at Nangia Andersen India Pvt. Ltd.

 

As of Thursday, the current price of imported oils such as CPO is INR 1,313 per 10 kg, down INR 20 from last month, soyoil at INR 1,280 per 10 kg, down INR 50 from last month and sunflower oil is at 1,390 per 10 kg, down INR 30 from last month at various Indian ports, said Indrajit Paul, head of research at Agrocorp International. 

 

"January imports were at 14-year low and February imports were at 4-year low so there is an increase of month on month basis. But the current imports are much lower than the historical average, which is around 750,000 million tonnes per month of total palm import (including crude palm oil and  refined, bleached, and deodorised palmolein imports),"  said Anshul Jadhav, an edible oil expert.

 

"India's crude palm oil imports are estimated to surge 13.2% in March to 423,000 tonnes as refiners took advantage of a slight price dip, yet overall demand remained subdued due to its continued premium over soyoil. While total edible oil imports are seen up 9.3% at 968,000 tonnes, refiners continued to favour soyoil, driving a 24% spike in its imports, whereas sunflower oil shipments are estimated to fall to a six-month low. Palm oil demand is expected to stay tepid until July, when prices could become more competitive," said Paul.

 

The renewed upward trend is driven by multiple factors, according to Ramjee. "Importers anticipate a market correction that will eventually lower prices, and they are rebuilding inventories following previous supply constraints. Global supply disruptions and seasonal demand spikes, particularly during festive periods, have also contributed to increased imports. Overall, the interplay of pricing, supply dynamics, and seasonal factors is reshaping India's palm oil import landscape," Ramjee said.

 

Going ahead, Patel expects palm oil import to rise further in April, and estimates it at around 500,000 tonnes. As per his estimates, soyoil import in April may be at around 350,000-400,000 tonnes and sunflower oil at around 175,000-200,000 tonnes.

 

The Solvent Extractors' Association of India is scheduled to release data on imports of edible oil for March by Apr. 15. India imports palm oil from Indonesia, Malaysia, and Thailand, and imports soyoil and sunflower oil from Argentina, Brazil, Ukraine and Russia.  End

 

Edited by Tanima Banerjee

 

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