India continues to cut its vegetable oil imports, adding to pressure on prices

In January, compared to December, India reduced the import of edible vegetable oils by 9.2% to 1.19 million tons, in particular sunflower – by 19% to 211 thousand tons, palm oil – by 12% to a 3-month low of 787 thousand tons, at the same time increasing soybean oil imports by 24% to 190,000 tons, which is still significantly lower than the 306,000 tons that were imported on average every month last year.

Refiners refuse to buy crude palm oil (CPO) due to negative refining margins and prefer soybean oil, the premium for which compared to palm and sunflower oils has fallen sharply, making it more affordable. Meanwhile, sunflower oil is becoming more expensive due to the increase in the cost of freight associated with the complication of navigation in the Red Sea.

A reduction in purchases of palm oil by the world’s largest importer can significantly increase its reserves in the main producing countries of Malaysia and Indonesia, which will affect quotations.

As soybeans are harvested in South America, soybean oil prices will fall for at least another 2-3 months, putting pressure on neighboring palm and sunflower oil markets. And in the spring, quotations will be under pressure from the seasonal increase in palm oil production.

Tags: soybean oil, India, palm oil, sunflower oil