PALMOILMAGAZINE, NEW DELHI – India’s palm oil imports in December 2024 hit their lowest level in nine months. A surge in palm oil prices to a two-and-a-half-year high prompted processors to shift to more affordable soybean oil, according to five traders.
The decline in palm oil imports by India, the world’s largest vegetable oil buyer, could weigh on Malaysia’s benchmark palm oil prices while likely supporting U.S. soybean oil prices.
Palm oil imports fell 40% in December compared to the previous month, dropping to 503,000 metric tons, the lowest since March 2023, traders estimate. Meanwhile, soybean oil imports rose 3% to 420,000 metric tons, the highest in four months, while sunflower oil imports dropped 22% to 265,000 metric tons.
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The reduction in palm oil and sunflower oil imports led to a 25% decrease in India’s total vegetable oil imports in December, falling to 1.19 million tons—the lowest in three months, according to traders.
“Indian buyers actively switched from palm oil to soybean oil after palm oil’s price premium over soybean oil surged in November and December,” said Rajesh Patel, managing partner at GGN Research, a vegetable oil trading firm, as quoted by Palmoilmagazine.com from The Economic Times on Saturday, January 4, 2025.
Typically, palm oil is traded at a discount compared to soybean and sunflower oils. However, dwindling stocks have driven palm oil prices higher than other vegetable oils with abundant supply.
“Palm oil currently has a premium of more than USD 100 per ton over soybean oil. This will likely prompt Indian buyers to further reduce imports in January,” said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage firm.
The Solvent Extractors’ Association of India is expected to release official data on December imports in mid-January.
India primarily imports palm oil from Indonesia, Malaysia, and Thailand, while soybean and sunflower oils are sourced from Argentina, Brazil, Russia, and Ukraine. (P2)
