MUMBAI – India’s July edible oil imports were set to jump to a record 1.86 million metric tons, nearly 60% more than normal, as refiners raised purchases to build stocks for festivals amid uncertainty over supplies from the Black Sea, dealers and cargo surveyors said on Tuesday, 25 July 2023.
Higher purchases by the world’s biggest importer of vegetable oils could help Malaysia and Indonesia bring down palm oil stocks and support benchmark futures, trading near their highest level in 4-1/2 months.
It would also support soyoil futures and help key sunflower oil-producing Black Sea countries in reducing inventories.
Around 1.5 million tons of edible oils were discharge at various indian ports in the first 24 days of July and another 386,000 tons are expected to be discharge in the remaining seven days, for a total of 1.86 million tons, according to average estimates from the dealers and cargo surveyors.
India’s average monthly edible oil imports in the 2021/22 marketing year were 1.17 million tons, according to trade body Solvent Extractors’ Association of India (SEA). In June, India imported 1.3 million tons of edible oils.
“Importers are keeping good volume on hand due to the Russia-Ukraine crisis and don’t want to be out of oil in any case,” said Rajesh Patel, managing partner at GGN Research, an edible oil trader and broker.
A year-long deal allowing the safe Black sea export of Ukraine’s grain expired last week after Russia quit and warned it could not guarantee the safety of ships, in a move the United Nations said would “strike a blow to people in need everywhere”.
The Black Sea region accounts for 60% of the world’s sunflower oil output and 76% of exports.
In 2022, prices of all edible oils jumped to a record high after sunflower oil supplies from the Black Sea region were disrupted following Russia’s invasion of Ukraine.
The improvement in refining margins also prompted refiners to buy more ahead of the festive season when demand usually goes up, said a New Delhi-based dealer with a global trade house.
“July imports are unusually high for all edible oils. Usually, when palm oil imports go up, soyoil and sunoil imports go down, and vice-versa. However, this month, imports of all edible oils are going up” he said.
Palm oil imports in July were expected to jump 46% from a month earlier to 1 million tons, the highest in seven months, according to the average estimate from dealers.
Sunflower oil imports could double from a month earlier to 385,000 tons, the highest in six months, while soyoil imports could rise to 475,000 tons, the highest in a year, dealers estimate.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine. (*)