India's palm oil imports as per the dealers in June experienced a significant increase of 49% compared to the previous month, reaching their highest level in three months.
This surge in imports was driven by a decline in palm oil prices, which reached their lowest point in 28 months, prompting buyers to take advantage of the favourable market conditions and increase their purchases.
The rise in buying by India, the world's largest vegetable oil importer, is expected to support Malaysian palm oil futures and assist top producers Indonesia and Malaysia in reducing their inventories.
Based on estimates from the dealers, India's palm oil imports in June reached 655,000 metric tons, compared to 439,173 metric tons in May.
In May, imports were at their lowest level since February 2021, as palm oil had been trading at a premium compared to soyoil and sunflower oil, causing buyers to shift towards the cheaper alternatives.
However, the decrease in imports and the subsequent price correction encouraged Indian buyers to increase their purchases in June. Price-sensitive Asian buyers typically favor palm oil due to its affordability and fast shipping times. The Solvent Extractors' Association of India is expected to release its June vegetable oil import data by mid-July.
Additionally, the dealers reported that India's soyoil imports in June witnessed a significant surge of 35% compared to the previous month's, totaling 432,000 metric tons. The negligible premium of soyoil over palm oil in recent months has driven buyers to increase their purchases, according to Rajesh Patel, the managing partner at GGN Research, an edible oil trader and a broker.
On the other hand, sunflower oil imports in June decreased by 36% from the previous month to 190,000 metric tons, as reported by the dealers.
India primarily imports palm oil from Indonesia, Malaysia, and Thailand, while soyoil and sunflower oil are sourced from Argentina, Brazil, Russia, and Ukraine.
