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India's palm oil imports surged in July, reaching 1.1 million metric tons, the highest level in nearly a year, driven by increased demand ahead of the festive season. This 37% rise from June, along with a 42% jump in soyoil imports, supported global prices and reduced inventories in key producing countries like Indonesia and Malaysia. Despite the overall increase, sunflower oil imports dropped by 21.3%, reflecting shifting market preferences. The total vegetable oil imports for July hit 1.9 million tons, the second-highest on record, leading to congestion at India's Kandla port due to the surge. As vegetable oil stocks in India rose to an eight-month high of 2.9 million tons, the market is expected to stabilize with a forecasted moderation in imports for August.

Key Highlights

* India's July palm oil imports surged by 37% to 1.1 million metric tons.

* Soyoil imports increased by 42%, marking the highest level in 13 months.

* Sunflower oil imports dropped by 21.3%, reflecting shifting market dynamics.

* Total vegetable oil imports reached 1.9 million tons, the second highest on record.

* Anticipated August imports are expected to moderate as traders adjust purchase volumes.

India’s palm oil imports soared to their highest level in nearly a year in July, driven by festive demand and a favorable price correction. The surge in imports, reaching 1.1 million metric tons, marked a 37% increase from June and aligned with market expectations. This significant rise in imports was echoed in the soyoil market, where imports grew by 42% to 391,791 tons, the highest volume in 13 months. Conversely, sunflower oil imports fell by 21.3% to 366,541 tons, indicating a shift in consumer preferences or supply chain adjustments.

The increase in palm oil purchases is expected to bolster inventories in top-producing countries like Indonesia and Malaysia, providing much-needed support to benchmark futures, which have been hovering near their lowest levels in seven months. India's robust import activity has already led to congestion at Kandla port, with berthing delays of 8 to 10 days reported by the Solvent Extractors' Association of India (SEA).

In July, total vegetable oil imports jumped 22.2% to 1.9 million tons, the second-highest monthly total on record. This spike was fueled by refiners stocking up ahead of the festival season, which typically sees a surge in edible oil demand. Despite the increase in imports, the higher inventory levels in India are expected to stabilize the market, with traders forecasting a moderation in vegetable oil imports to around 1.5 million tons in August.

India continues to rely heavily on imports from key suppliers, including Indonesia, Malaysia, Thailand for palm oil, and Argentina, Brazil, Russia, and Ukraine for soyoil and sunflower oil. With vegetable oil stocks in India now at an eight-month high of 2.9 million tons, the market may see a period of relative stability as the country navigates its peak demand season.

Conclusion

India's July palm oil imports surged amid festive demand, stabilizing global prices. August imports are expected to moderate, easing supply pressures.

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