India's vegetable oil buyers turn to Malaysia, Argentina in May during Indonesia's absence

India's soybean oil imports rose in May while palm oil imports fell due to a temporary export ban by Indonesia, data from national trade body the Solvents Extractors' Association of India showed June 14.

Soybean oil purchases rose 36.5% to 373,043 mt in May from 273,151 mt in April, led by a surge in imports from Argentina, the leading global soybean oil exporter, the data showed.

The current price structure in world markets along with an import duty advantage will facilitate larger soybean oil imports in the near term, the association said.

New Delhi recently announced a 'tax holiday' on the import of crude soybean and sunflower oils under which the effective duty on 2 million mt of crude soybean oil and sunflower oil is reduced to zero from 5.5%, while the crude palm oil duty remains at 5.5%.

Overall vegetable oil imports by India, the world's largest vegetable oil buyer, were pegged at 1.01 million mt in May, down 15% year on year but up 11.6% from April, according to the association.

Palm oil outlook

While palm oil purchases fell 10% on the month in May, the association said India's imports may rebound after Indonesia lifted its ban on the export of palm oil from May 23 and reduced its export tax and levy to $488/mt from $575/mt.

An increase in exports by Indonesia would have a dampening effect on palm oil prices in the global market, the association said.

India's palm oil imports fell to 514,022 mt in May from 572,508 mt in April, although the country ramped up purchases from Malaysia and Thailand to cover their requirements, the association data showed.

India's sunflower oil shipments more than doubled in May to 118,482 mt from 54,426 mt in April owing to a sharp surge in imports from Russia and Argentina.

India imported about 41,000 mt of sunflower oil from Russia and 64,500 mt from Argentina in May. There were no shipments reported from Ukraine in the month.