India boosts soybean oil imports in May as palm oil loses price advantage

Indian refiners shifted toward soybean oil imports in May as palm oil’s price advantage over competing vegetable oils narrowed significantly, traders told Economic Times.

Soybean oil imports surged 38% month-on-month in May to 497,000 tonnes, the highest level in five months. In contrast, sunflower oil shipments dropped 32.3% to 294,000 tonnes over the same period.

Despite the shift, palm oil imports also increased slightly from April’s four-month low but remained below average levels. Traders estimated palm oil imports at around 551,000 tonnes in May, compared with 513,403 tonnes a month earlier.

Overall edible oil imports into India rose 2.6% month-on-month to 1.3 million tonnes in May, driven mainly by higher soybean oil purchases. However, analysts warned that weaker-than-usual palm oil imports from the world’s largest vegetable oil importer could raise inventories in major producing countries such as Indonesia and Malaysia and weigh on Malaysian palm oil futures.

Market participants said soybean oil gained competitiveness as its premium over palm oil narrowed to about $40 per tonne, encouraging refiners to switch purchases. Analysts added that palm oil would need to trade at a steeper discount to soybean oil to regain stronger demand.

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