Sources say that India's palm oils imports will hit a 5-year low on January due to negative margins.
India's palm-oil imports will plunge to their lowest level in five years this January due to negative refining margins. The tropical oil's higher price than its rivals is driving buyers to soyoil which is more competitively priced, according to government and industry officials.
The world's largest buyer of vegetable oil, Malaysia, could reduce palm oil imports and weigh down on Malaysian benchmark palm oil prices. However, this would support U.S. soybean oil futures.
A government official who requested anonymity because he wasn't allowed to speak with the media said: "About 110,00 metric tons palm oil were cleared in the first six months of the year, which is quite a small amount when compared to monthly imports."
A leading Indian palm buyer said that the lack of ships carrying palm oil in key ports like Kandla and Haldia over the next couple weeks could mean that imports will drop to 370,000 metric tonnes by January.
Solvent Extractors' Association of India reports that India imported more than 750,000 tonnes of palm oil per month on average in the marketing period ending in October 2024.
In January 2024, India imported 782 983 tons of palm oil.
The Indian buyer stated that "everyone in the industry is cutting down palm oils purchases due to the negative refining margins."
A shipping company and two vegetable oil brokers who compile data on ships waiting to unload in ports have estimated that the imports may range from 340,000 tons to 370,000 tons.
An official from a Mumbai shipping company said that in the second half of the month, palm oil imports will be higher than they were during the first. However, the total monthly imports won't exceed 370,000 tonnes.
The lowest level since March 2020 when New Delhi's unofficial restrictions on Malaysian imports reduced shipments.
According to Rajesh Patel, managing partner of GGN Research and edible oil trader, the palm oil refinery is losing more than $30 per ton for January shipments. The oil can be purchased at lower prices in February and March, he said.
Dealers said that the price of crude palm oil (CPO), including freight, insurance, and cost (CIF), for January deliveries is $1,155 per ton. For February and March, it's $1,140.
Sandeep Bajoria is the CEO of Sunvin Group. A vegetable oil brokerage.
Bajoria said that "buyers are switching to soyoil instead of palm oil." This trend will likely continue until palm oil is corrected and available at a discounted price.
India imports a lot of palm oil, mainly from Indonesia and Malaysia, and also soyoil, sunflower oil, and other oils from Argentina, Brazil and Ukraine. (Reporting and editing by Clarence Fernandez; Reporting by Rajendra J. Jadhav)
(source: Reuters)
