by PressReducing imports of vegetable oils: an overview of the Indian market
What India’s reduction in oil imports has to do with it
Analysts of the German company Oil World note the reduction of imports of vegetable oils by India. In the current year 1.38 million tons of products were purchased, and for the same period last year 1.57 million tons. The main factor in reducing the supply was the reduction of palm oil — from 10 million to 7.5 million tons. The reason was a decrease in demand for this product from the local population. Major exporters of palm oil to India are Malaysia and Indonesia. These countries have reduced the supply as a whole by 1.5 million tons.
It should be noted that the demand for sunflower oil increased from 2.4 million to 2.5 million tons. Imports from Ukraine decreased from 2.1 to 1.9 million tons. At the same time supplies from Russia have significantly increased, last period they were 170 thousand tons and now they are 451 thousand tons.
Experts note the increase in domestic demand for soybean oil, which resulted in larger supplies. Argentina has demonstrated good indicators, here there is a record oil export to India for 4 years — 2.8 million tons.
Analysts predict that in the coming months, against declining imports of sunflower oil, demand for soybean oil will increase.
In addition to oils, India reduced imports of purified bleached deodorized palmolein. The reason was the government’s new supply rules — this product fell into the category of goods for which a special import license is required. Because of this, many Indian buyers switched to other variants of palmolein substitute.
As for the situation on world exchanges, prices for soybean and sunflower oils continue to go up. Over the past week, these products have increased in price by 7% and 11%. The main problem is the probable reduction of soybean crop in Argentina. Here, the drought has killed off some of the crops, and in just one week, the portion of bad crops rose from 20% to 31%. In addition, a decline in oil imports by India and China influenced the value formation.
In Malaysia, palm oil futures are up 1.6%, which is a record high for the last 13 years. The fact is that traders are trying to secure themselves for the future, as rising prices will make buyers pay attention to the relatively cheap palm oil, and its price may rise.
So far, the supply from Brazil, where stocks of soybeans have increased, is holding back even higher prices. Many importers made large purchases of this legume crop to protect themselves from future price increases.