Palm oil imports to India to reach 5-year low due to negative margins

India’s palm oil imports may fall to a nearly five-year low in January due to negative refining margins, as the tropical oil’s higher price compared to competitors pushes buyers to purchase more competitive soybean oil, government and industry officials told Reuters.

The reduction in palm oil imports by the world’s largest oil buyer may put pressure on Malaysian palm oil benchmark prices, but will support U.S. soybean oil futures.

“In the first half of January, the customs cleared about 110 thousand tons of palm oil,” said the official, who asked to remain anonymous. At the end of the month, imports will amount to about 340-370 thousand tons, which will be the lowest since March 2020, when New Delhi’s unofficial restrictions on imports from Malaysia led to a reduction in supplies. In January 2024, India imported 782.9 thsd tonnes of palm oil.

According to the Oilseed Producers Association of India (SEA), last year India imported an average of more than 750 thsd tonnes of palm oil per month.

According to Rajesh Patel, managing partner of GGN Research, an edible oils trading company, processors will suffer losses of more than $30 per tonne when processing palm oil in January, and prices for February and March deliveries will be even lower.

According to dealers, crude palm oil (CPO) is currently offered in India at a price of about $1155 per ton, including insurance and freight (CIF) for deliveries in January, while deliveries in February and March were offered at $1140 and $10.

In December, India reduced imports of edible oils by 25% to a 3-month low of 1.19 million tons, including sunflower oil by 22% to 265 thousand tons and palm oil by 40% to a 9-month low of 503 thousand tons.

Tags: soybean oil, India, palm oil