India purchased a record volume of edible oil in August

India’s edible oil imports surged 5% to a record 1.85 million tons in August as businesses bought more than 1 million tons of palm oil for the second straight month to build stocks for upcoming festivals, four dealers told Reuters.

The increase in purchases by the world’s largest importer of vegetable oils may help reduce palm oil stocks in Indonesia and Malaysia and support futures for basic products. The purchase helped to strengthen soybean oil futures and may reduce stocks in the Black Sea countries that produce sunflower oil.

India’s average monthly edible oil imports in 2021/22 marketing year amounted to 1.17 mln tonnes, according to the Indian Oil Producers Association (SEA). In July, India imported 1.76 mln tonnes, which was also a record high.

Imports of palm oil increased from 1.09 million tons in July to 1.12 million tons in August, the highest in nine months, according to average dealer estimates.

SEA is likely to publish its August oil import data by mid-September.

“Factories have been actively buying for the upcoming festival season,” said Rajesh Patel, managing partner of GGN Research, an edible oil trader and broker.

“Retail demand has been moderate, but the industry expects it to pick up in the coming months.”

Oilseed imports jumped 11.5% month-on-month to 365,000 tons, the highest in seven months, while soybean oil imports rose 3.7% to 355,000 tons, according to dealer estimates.

As the discount for palm oil compared to soybean and sunflower oil continues to widen, processors are increasing their purchases in anticipation of demand during the upcoming festivals, said Sandeep Bajoria, CEO of Sunvin Group, an 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.

Imports in August surged as several vessels originally scheduled to unload in July at Kandla port were eventually unloaded in August due to port congestion, said a dealer with a New Delhi-based global trading house.

Concerns about local soybean and peanut production due to dry weather are also prompting processors to import more edible oils, the dealer added.

August in India was the driest in more than a century: during the month the country received 36% less rainfall than usual.

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