Lower palm oil imports by India, the world’s biggest buyer of vegetable oils, could weigh on benchmark Malaysian palm oil prices and support US soyoil futures.
“Palm oil is getting pricey due to supply issues, so buyers are naturally shifting to soyoil and sunflower oil instead,” said Sanjeev Asthana, president of the Solvent Extractors’ Association (SEA) of India (SEA), in an interview with Reuters.
“The country’s palm oil imports in the 2024/2025 marketing year ending in October 2025 could fall to as low as 7.5 million metric tonnes, the lowest in five years,” said Asthana, who is also the CEO of Patanjali Foods Ltd.
“Palm oil is losing market share to soft oils, which are projected to account for a slightly larger volume of imports,” he said.
Palm oil accounted for 56% of India’s total edible oil imports in the last marketing year, but in the first three months of the current year its share fell to 43%, the SEA data showed.
Palm oil has been trading at a premium over rival oils for the past few months as supplies from top producers Indonesia and Malaysia were affected by floods at a time when Jakarta has also moved to increase the tropical oil’s use in biodiesel.
“The current premium for palm oil is not sustainable, and once it begins trading at a discount, likely within two months, Indian buyers will increase their imports,” Asthana said.
“Soyoil imports in the current year could increase by 1 million to 1.5 million tonnes from last year’s 3.4 million tonnes, while sunflower oil imports may rise slightly from last year’s record level of 3.5 million tonnes,” he said.
India meets nearly two-thirds of its vegetable oil demand through foreign sourcing.
It buys palm oil from Indonesia, Malaysia and Thailand, while soyoil and sunoil come from Argentina, Brazil, Russia and Ukraine.
“The rising availability of local oils, which will help fulfill incremental demand, is expected to keep the country’s total edible oil imports steady at around 16 million tonnes this year,” Asthana said.–REUTERS
