Home / Commodities / Freight News / INDIA DATA: May palm oil imports up 10% as pandemic restrictions ease

INDIA DATA: May palm oil imports up 10% as pandemic restrictions ease

India’s imports of crude palm oil in May were up 10% month on month to a four-month high at 769,602 mt, data released by the national trade body showed, helped by a gradual reopening of lockdowns and palm oil’s price advantage over other edible oils.

India’s May CPO imports were slightly above industry expectations of 750,000 mt, and meant imports during the first seven months of the marketing year (November-October) were up 39% to 4.44 million mt due to the higher spread between soft oils and palm oils, the Solvent Extractors’ Association of India said June 14.

India, the world’s largest buyer of palm oil, purchases about 8 million-9 million mt per year. However, imports took a hit when a sharp rally in vegetable oil prices and pandemic-led restrictions slowed local demand in the past year.

India has has faced a massive second wave of COVID-19 infections since March, prompting many states and districts to enforce local restrictions on movement, social gatherings and the hotels, restaurants and catering sector.

“Local demand will be down 3%-4% in the first two weeks of June. But, overall, this month will increase [imports] on a month-on-month basis,” Marcello Cultrera, institutional sales manager at Philip Futures, said about the demand outlook.

“Over the past six sessions, BMD prices reversed by 960 points (230 dollars). Each time we have seen strong reversals over the past six months, demand always improved,” Cultrera said.

Taxes deter buyers

Malaysia continued to be the leading importer of CPO to India, with Indonesia in second position as the country’s $255/mt export levy gave Malaysian palm oil a big price advantage, according to SEAI

Both Malaysia and Indonesia — which account for 85% of the world’s palm oil supply — have set progressive tax slabs on CPO exports which increase incrementally as reference prices of palm oil cross per-determined thresholds. However, Indonesia has tagged an additional export levy to subsidize its internal biodiesel mandate

Malaysian imports grew to 2.34 million mt in the seven months to May, while Indonesia’s imports were at 1.95 million mt, SEAI data showed.

Palm oil prices have risen sharply over the past year, tracking higher soybean oil prices with which it competes for market share in the commodity markets. The average CIF India price of CPO was $1,250/mt in May, versus $558/mt in May 2020, according to SEAI.

Meanwhile SEAI data showed palm oil imports from Thailand crossed 100,000 mt in May. While India imports very little-to-nil palm oil from Thailand, imports zoomed in May as Thai-origin palm oil was $10/mt cheaper than larger rivals, industry watchers said.
Source: Platts

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping