Low Prices Mean India Could Reap Record Palm Oil Imports

India: India is expected to see an increase of 16% in its Palm oil imports for the 2022/23 fiscal year. The country's consumption of the oil could reach a four-year high of 9.17 million tonnes, largely driven by an anticipated surge after two years of contraction due to the COVID pandemic and its subsequent lockdowns. This prediction was made by a senior figure within the industry.

Higher purchases by the world’s biggest importer of vegetable oils could potentially boost Palm oil futures FCPOc3 and bring them closer to their four-month high. This is attributed to easing pandemic restrictions and lower prices that have enabled consumption to rebound by about 5% after two consecutive years of decline, according to Sudhakar Desai, president of the Indian Vegetable Oil Producers’ Association.

Demand for Palm oil is expected to rise, largely due to its lower cost compared to other alternatives like Sunflower and Soyoil. This could help fill the gap of consumption growth, as Palm oil will be imported in larger quantities.

India's imports of Palm oil for the first four months of the 2022/23 marketing year have skyrocketed, with a 74% increase from last year. This brings the total to 3.67 million tonnes. India primarily sources its Palm oil from Indonesia, Malaysia and Thailand, while they source their Soybean and Sunflower oil from Argentina, Brazil, Russia and Ukraine.

India's vegetable oil imports could see a slight uptick in the current year, according to a recent statement from Desai. Soybean oil imports may be down compared to last year, while Sunflower oil imports are anticipated to increase slightly. Overall, 14.38 million tonnes of vegetable oil are expected to come into the country this year - up slightly from 14.07 million tonnes during the previous year.