Record Surge in India's July Edible Oil Imports Due to Palm Buying

India, the world's largest importer of vegetable oils, purchased a record quantity of edible oils for July delivery. This unprecedented increase is primarily due to higher palm oil and soyoil purchases made in anticipation of an expected rise in import duties. As per projections, India's imports are likely to reach 1.92 million metric tons marking a significant 26% surge from the previous month. 

This surge in India’s edible oil purchase comes as good news for top producer countries like Indonesia and Malaysia as it would aid in reducing their inventories while also supporting benchmark prices. The data shared by trade houses have indicated that India’s edible oil imports will jump to an all-time high of nearly 1.92 million metric tons, up by approximately 26% from one month ago. 

In this current marketing year starting November 2023, India has been importing on average around 1.2 million tons of edible oil each month. A government official who preferred not be named stated that about 1.45 million tons of these imported oils have already been discharged at various ports across the country which includes around 850k tonnes specifically accounted for by palm oil alone. 

Dealers forecasted that July's palm oil imports could see a whopping leap of about 45% compared to last month reaching an impressive figure close to around 1.14 million metric ton - marking it as the highest volume imported over a span of past twenty months. 

Sandeep Bajoria, CEO at Sunvin Group (a vegetable brokerage firm) explains this unexpected buying spree stating: "Correction in palm oil prices during May and June made it more affordable than its rival oils." He further added how healthy refining margins during this period encouraged refiners to place orders intended for July shipments. 

Meanwhile expectations were rife among buyers regarding potential duty hikes leading them into ramping up their purchases planned for July deliveries according Mr.Bajoria 

However, despite these anticipations, Finance Minister Nirmala Sitharaman did not announce any changes in the duty structure on edible oils during her budget presentation for the fiscal year 2024-25. 

Soyoil imports are also expected to witness a similar surge of around 45% from previous month reaching about 400k metric tons - marking it as highest volume imported over past thirteen months. Rajesh Patel, managing partner at GGN Research (a trader and broker firm dealing with edible oils) stated that delayed shipments originating from South America taking more than six weeks were responsible for this increase in soyoil imports. 

However sunflower oil's case is different with its import volumes falling by an estimated 18% to around 380k tons compared to last month’s record shipment figures. 

India primarily sources its palm oil requirements from countries including Indonesia, Malaysia and Thailand while soyoil and sunflower oil are majorly imported from Argentina, Brazil, Russia and Ukraine.