India's vegetable oil imports rose to 1.87 million mt in August, up 33% on the year as a dip in international vegetable oil prices and fears of lower oilseed yields domestically spurred demand at the world's largest buyer, trade body the Solvent Extractors' Association of India (SEA) said Sept. 14.
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Vegetable oil imports in August eclipsed the prior year-high set in July of 1.77 million mt, SEA data showed.
"Sizable correction in vegetable oil prices coupled with a strong recovery in demand and threats of import supply in view of closure of the Black Sea grain deal and a potential risk to the domestic oilseed crops due to lower than anticipated monsoon rains has resulted in a back-to-back stronger veg oil imports in the country." Anilkumar Bagani, head of research at Sunvin Group, a Mumbai-based brokerage said.
In the first 10 months of the current marketing year 2022-23 (November-October) India imported 14.12 million mt of vegetable oils, up 24% from the same period last year and may be headed for an all-time high in terms of annual imports, SEA said.
"We will not be surprised to see record import of over 16 million mt to 16.5 million mt during current oil year. Earlier India's highest import was 15.1 million mt in MY 2016-17," SEA said Sept. 14.
Palm oil imports, which accounts for a majority share of India's imports, rose to 1.13 million mt, up 13.7% from the year before and 4% from the 1.09 million mt imported in July, according to SEA data.
Soybean oil purchases by India were up by 4.56% on month to 357,890 mt in August from 342,270 mt in July. The July 2022 import of commodity stood at 244,697 mt, according to SEA data.
Sunflower oil import in August surged by almost 12% to 365,870 mt against 327,259 mt in previous month, according to SEA data.
Sunflower oil purchases in July 2022 were at 135,308 mt.
Brazil and Russia have emerged as the dominant sellers of soybean and sunflower oil respectively for India in MY 2022-23, shifting from Argentina and Ukraine in previous years.
India has imported 160,572 mt of sunflower oil from Russia in August against 72,780 mt last year. The purchase of soybean oil from Brazil by India in August stood at 130,968 mt compared to 67,750 mt previous year.
Stock levels and prices
Total vegetable oil stocks -- which encompasses port and pipeline stocks -- also reached a record high of 3.74 million mt by Sept. 1, SEA said, rising from 3.28 million mt a month before.
Of this, portside stocks were provisionally estimated at 1.46 mt of palm oil tons, 383,000 mt of degummed soybean oil and 296,000 of crude sunflower oil, SEA said Sept. 14.
According to the SEA, this influx of imports is driven by the current low 5.5% duty on crude palm oil, soybean oil, and sunflower oil, transforming India into a prime destination for excess oil supplies.
In August, the average price of crude palm oil at Indian ports on CIF basis was $924/mt, while, crude soybean oil was $1,056/mt and crude sunflower oil was $1,078/mt, SEA said
Platts, a part of S&P Global Commodity Insights, assessed crude palm oil CFR West Coast India at $874/mt on Sept. 13, down 7.1% from end-August.