India cuts oil imports to 16-month low in October

India’s edible oil imports fell to the lowest level in 16 months in October as rising inventories prompted processors to cut purchases of palm, soybean and sunflower oil, six dealers told Reuters.

The reduction in purchases by the world’s largest importer of vegetable oils may lead to an increase in palm oil stocks in key producers in Indonesia and Malaysia, which will put pressure on benchmark futures.

They will also affect soybean oil futures in the US and sunflower oil prices in the Black Sea region.

India’s total edible oil imports in October fell to 1 million metric tons, down 33% from a month ago and the lowest since June 2022, according to dealers’ average estimates.

Imports of palm oil decreased by 14% to 715 thousand tons during the month, the lowest level in four months.

Active purchases boosted India’s edible oil imports to 5 million tons between July and September, but demand was not high enough to cover imports, said Rajesh Patel, managing partner at edible oil trader and brokerage GGN Research.

“Inventories have jumped due to increased imports, which is now forcing processors to reduce their imports,” he said.

Domestic stocks of the oil jumped to 3.6 million tons by Oct. 1 from 2.6 million tons a year earlier, according to the Solvent Extractors Association of India (SEA), a trade organization that is likely to release its October import data by mid-November.

Imports of soybean oil in October decreased by 63% compared to the previous month to 134,000 tons, which, according to dealers, is the lowest since January 2021.

Oilseed imports decreased by 47% to 158,000 tons, the lowest level in 7 months.

The growing supply of summer sowing oilseeds is reducing the need for edible oil imports, said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.

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

India’s edible oil imports in the 2022/23 marketing year, which ended on October 31, jumped 17% year-on-year to a record 16.5 million tons, thanks to increased purchases in the November-January and July-September periods, dealers said.

Imports of palm oil jumped 24% to a record 9.8 million tons over the year, while soybean oil imports fell 12% to 3.67 million tons.

Imports of sunflower oil surged 55% to a record 3 million tons, as the oil has been sold at a discount compared to soybean oil for many months, dealers said.

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