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India’s palm oil imports hit a 14-year low in January, dropping 45% from December to 275,241 metric tons, as refiners turned to cheaper soyoil due to negative refining margins. This shift is expected to pressure Malaysian palm oil prices while boosting U.S. soyoil futures. In contrast, soyoil imports rose 5.6% to 444,026 tons, the highest in seven months, while sunflower oil imports increased 8.9% to 288,284 tons. The decline in overall vegetable oil imports led to the lowest stock levels since April 2022. Experts predict a slight recovery in palm oil imports in February but expect soyoil demand to moderate. India sources palm oil from Indonesia, Malaysia, and Thailand, while soyoil and sunflower oil come from Argentina, Brazil, Russia, and Ukraine.

Key Highlights

* India’s palm oil imports in January fell 45% to a 14-year low.

* Soyoil imports surged 5.6% to the highest in seven months.

* Sunflower oil imports also rose 8.9% in January.

* Total vegetable oil imports dropped 14.8% to an 11-month low.

India’s palm oil imports fell sharply in January, dropping 45% from December to just 275,241 metric tons, marking the lowest level since March 2011. This decline was primarily driven by refiners shifting to soyoil, which offered better refining margins. With palm oil becoming more expensive than soyoil and sunflower oil, refiners preferred the cheaper alternatives, leading to an increase in soyoil imports by 5.6% to 444,026 metric tons, the highest in seven months. Sunflower oil imports also saw an 8.9% rise, reaching 288,284 metric tons.

The steep drop in palm oil imports has had a significant impact on vegetable oil prices. Typically, palm oil trades at a discount compared to soyoil and sunflower oil. However, declining stocks and higher prices have made it less attractive to refiners, prompting a shift towards alternative oils.

In addition to shifting preferences, India’s total vegetable oil imports in January declined 14.8% to 1 million metric tons, marking the lowest level in 11 months. As a result, vegetable oil inventories fell to 2.18 million metric tons at the start of February, the lowest since April 2022.

Looking ahead, industry experts predict that palm oil imports could see a marginal increase in February, although they are unlikely to return to previous levels. Soyoil demand may slightly moderate, while sunflower oil imports could rise marginally. India continues to source palm oil from Indonesia, Malaysia, and Thailand, while soyoil and sunflower oil are imported from Argentina, Brazil, Russia, and Ukraine.

Finally

India’s palm oil imports remain subdued due to high prices, while soyoil demand continues to grow. A slight recovery in palm oil imports is expected, but price dynamics will dictate future trends.

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