India’s palm oil imports in November jumped more than a fifth from the previous month, as refiners favoured the tropical oil, due to steep discounts compared to rival soyoil and sunflower oil, five dealers told Reuters on Monday.
Higher purchases by the world’s biggest importer of vegetable oils could help lower palm oil stocks in top producers Indonesia and Malaysia, and support benchmark futures.
India’s November palm oil imports jumped 22% from a month earlier to 867,000 metric tons, the highest in three months, estimates from dealers showed.
The discount on palm oil to soyoil and sunflower oil has been widening over the past few weeks, encouraging refiners to switch to palm oil, said Sandeep Bajoria, the chief executive officer of Sunvin Group, a vegetable oil brokerage.
Higher palm oil imports lifted India’s total edible oil imports in November to 1.13 million metric tons, up 13% from a month earlier, dealers said.
Edible oil stocks in the country have surged close to a record high, prompting refiners to liquidate port stocks before making fresh orders, said Rajesh Patel, a managing partner of edible oil trader and broker GGN Research.
Domestic stocks of vegetable oil jumped to 3.1 million tons by Nov 1 from 2.45 million a year earlier, said trade body Solvent Extractors’ Association of India, which is likely to publish its data on November imports by mid-December.
Soyoil imports in November rose 7% from a month earlier to 145,000 tons, but far below average imports of 306,000 tons in the last marketing year, dealers estimated.
Soyoil imports have been declining for the past two months due to negative refining margins, its hefty premium over rival oils, and an increase in local supplies, said Vipin Gupta, the CEO of Dubai-based trader Glentech Group.
Sunflower oil imports fell by 21% to stand at 122,000 tons, the lowest in 17 months, dealers said.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.