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India’s palm oil imports in August fell by 26% from July to 797,482 metric tons due to high domestic stocks and negative refining margins, pushing refiners to switch to cheaper soyoil. As a result, soyoil imports rose 16% to 454,639 tons, while sunflower oil imports dropped 22.5%. Palm oil, which usually trades at a discount to soft oils, was offered at a $40 per ton premium over soyoil for September shipments. Overall, India’s edible oil imports declined by 17% to 1.53 million tons. Despite the lower imports, vegetable oil stocks in India increased to 2.93 million tons, the highest in nine months.

Key Highlights

* India's palm oil imports fell by 26% in August, totaling 797,482 metric tons.

* Rising domestic stocks and negative margins prompted the shift to soyoil.

* Soyoil imports rose by 16% to 454,639 tons, while sunflower oil imports dropped 22.5%.

* Palm oil prices surged, trading at a $40 premium over soyoil in September.

* India's total edible oil imports declined by 17% in August, reaching 1.53 million tons.

India, the world’s largest importer of vegetable oils, saw a significant reduction in palm oil imports in August, declining 26% from July to 797,482 metric tons. This drop was primarily driven by sufficient domestic stocks and unfavorable refining margins, leading refiners to opt for alternative oils. As a result, the country's total edible oil imports dropped by 17% to 1.53 million tons. In contrast, imports of soyoil surged 16% to 454,639 tons, while sunflower oil imports decreased 22.5% to 284,108 tons, according to data released by the Solvent Extractors' Association of India (SEA).

The price dynamics of palm oil contributed to this shift, with palm oil now trading at a $40 per ton premium over soyoil for September shipments. Traditionally, palm oil is sold at a discount to soft oils like soyoil, but recent market changes have reversed this trend. Indian refiners, facing the costlier palm oil, increased their soyoil purchases. The switch to soyoil highlights the sensitivity of Indian buyers to price movements in the global vegetable oil market.

Despite the decline in August imports, India’s vegetable oil stocks rose to 2.93 million tons as of September 1, marking a nine-month high. Experts predict that while edible oil imports could soften in September due to lower soyoil and sunflower oil buying, palm oil imports may slightly increase, potentially exceeding 800,000 tons.

Finally

India’s shift from palm oil to soyoil reflects rising costs and domestic stock levels, potentially influencing future import trends and global oil markets.

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