Indian importers massively cancel purchases of palm oil

Indian importers have canceled orders for 70 thsd tons of crude palm oil (CPO) to be delivered from March to June. This was due to a sharp rise in prices on the Malaysian market and negative refining margins in India. In the last three days alone, 40 thsd tons have been canceled as palm oil futures in Malaysia have risen by more than 11% in four weeks, Reuters reports.

It is expected that these actions may limit the growth of palm oil prices, while they may support the soybean oil market, as some importers are switching to this product. Indian buyers who refuse to purchase are negotiating with suppliers to cancel contracts, often at a slight discount from the current market price.

According to Sandeep Bajoria, Executive Director of Sunvin Group, a brokerage company, soybean oil supplies are actively coming to India in February-March at a lower price, which stimulates the refusal of palm oil. Today, CPO for March delivery to India is offered at about $1,210 per ton (CIF), while a month ago the price was $1,120-1,130 per ton.

In January, India’s palm oil imports fell by 45% compared to December, reaching 275,241 tons – the lowest level in almost 14 years. In addition to price fluctuations, importers are also considering a possible increase in import duties on palm oil, which could support local oilseed producers.

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