India’s palm oil imports soar

Sub: Eco

Sec: External sector

Context:

In October 2024, India experienced a significant surge in palm oil imports, with the total imports rising by 59% compared to September 2024. The country imported 840,000 metric tons of palm oil in October, marking a three-month high.
India buys palm oil mainly from Indonesia, Malaysia and Thailand.

Reasons for increased imports:

Festival demand: India’s festive season, particularly the Dussehra and Diwali festivals, led to a sharp rise in consumption of sweets and fried foods. This seasonal demand prompted refiners to replenish their stocks of edible oils, including palm oil.
Stock depletion: Import levels had been lower in previous months, which led refiners to boost purchases in October to make up for the deficit.
Competitive pricing: Palm oil prices were relatively more competitive in August, which encouraged Indian buyers to place orders for deliveries in subsequent months.

Impact on palm oil producers:

The increased demand from India, the world’s largest importer of vegetable oils, could potentially result in reduced palm oil stocks in major producing countries such as Indonesia and Malaysia.
This scenario could support higher benchmark futures for palm oil in the global market.

Other edible oil imports:

Soybean oil: India’s imports of soybean oil fell by 10% in October, amounting to 344,000 metric tons. This decline suggests a reduced demand for soybean oil in comparison to palm oil.
Sunflower oil: Imports of sunflower oil rose sharply by 57% to 240,000 metric tons, primarily due to delayed shipments from the previous month arriving in October.

Overall edible oil imports:

India’s total edible oil imports in October 2024 reached 42 million metric tons, a 34% increase from the previous month. The rise in total imports was driven by the sharp increase in palm oil and sunflower oil purchases.