India’s palm oil imports fell to a 9-month low in February due to competition from sunflower oil

India’s palm oil imports fell to their lowest level in nine months in February as higher prices prompted buyers to cut purchases of the tropical oil in favor of rival sunflower oil, a leading trade body said on Wednesday.

Reduced purchases by India, the world’s biggest importer of vegetable oils, could limit gains in benchmark Malaysian palm oil futures but help reduce sunflower oil stocks in the Black Sea region.

Palm oil imports in February fell about 36% from the previous month to 497,824 metric tons, the lowest since May 2023, the Mumbai-headquartered SEA Association of India said in a statement.

“The availability of palm oil to meet edible oil requirements has declined as two major producers, Malaysia and Indonesia, are diverting it to biodiesel production. This could lead to higher prices this year,” the SEA said.

On the other hand, sunflower oil imports jumped about 35% to 297,092 tons in February due to lower prices and shipments originally expected in January arrived in February due to delays caused by Houthi attacks on Red Sea shipping lanes, it said.

However, soybean oil imports in February fell 8% from a month earlier to 172,936 tons and were well below the monthly average imports of 306,000 tons in the marketing year ended Oct. 31.

This, combined with a drop in palm oil imports, caused India’s total edible oil imports in February to fall to the lowest level in nearly two years at 0.97 million tons, SEA said.

India’s vegetable oil stocks fell 10% on March 1 from a month earlier to 2.38 million tons, the lowest level in 18 months, due to lower imports in the past few months, SEA data showed.

“As oil refiners rebuild stocks and improve profitability, we may see imports pick up in March,” a New Delhi-based dealer at the global trading house said, Reuters reported.

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