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India’s edible vegetable oil imports in May rose 3% from April to 1.053 million tonnes, with palm oil continuing to cede its import share to rivals sunflower and soybean oil, data from the Solvent Extractors Association of India (SEA) showed on Thursday.
The rise comes following a jump in imports of crude degummed soybean oil (CDSBO) and crude sunflower oil (CSFO), which rose by 21.5% and 18.5% on the month to 318,887 tonnes and 295,206 tonnes, respectively, reaching a total of 614,093 tonnes – 20% higher than April.
Argentina and Brazil were India’s top two suppliers for CDSBO in May at 197,444 and 104,940 tonnes respectively.
For CSFO, Argentina topped the supplier list again with 86,990 tonnes, while Russia placed second at 71,025 tonnes.
On the other hand, imports of palm oil – consisting of crude palm oil (CPO), refined bleached deodorised (RBD) palm olein and crude palm kernel oil (CPKO) – fell to its lowest level seen in 27 months to 439,173 tonnes –13.9% lower from April.
The dip continues from April where the spread between palm oil and soft oils narrowed considerably, prompting buyers to switch their purchases to soybean and sunflower oil.
Buyers were also heard cancelling more expensive palm oil cargoes purchased earlier and replacing them with soft oils.
Average CIF India prices for CPO were recorded at $938 per tonne for May, versus $957 per tonne for CSFO and $999 per tonne for CDSBO, according to SEA data.
The price spread ranged around $80-320 per tonne a year ago, with CPO priced lower.
Palm oil imports are expected to improve in June and July, with buying interest from India seen picking up as the spread between palm oil and its rivals widens further compared to earlier.
On a 2022-23 oil marketing year basis (November-October) however, palm oil imports remain dominant with total imports for the marketing year so far coming to 5.35 million tonnes – 59% of total edible oil imports and 43% higher from a year ago – while soft oil imports fell 2.7% on the year to 3.71 million tonnes.
Total edible oil imports for the first seven months of 2022-23 came to 9.06 million tonnes, 18% higher than a year ago.
For May, non-edible veg oil imports were at 4,998 mt, 82.5% lower from April and bringing the total veg oil imports for May to 1.06 million tonnes, 0.8% higher on the month but 0.3% lower than a year ago.
Total veg oil imports for 2022-23 so far came to 9.17 million tonnes, 18% higher than the same period last year.
Lastly, stock levels in India were pegged at 2.94 million tonnes as of June 1, 9.4% lower on the month.
On Tuesday, the Indian government announced a reduction in the base import duty of refined sunflower oil and soybean oil to the same level as refined palm oil at 12.5% from 17.5% previously with effect from June 15.
The move is seen as a way by the government to address inflation and keep edible oil prices in check, though market participants are skeptical if it would make any significant change in the composition of imports, given that India currently imports crude soft oils and zero refined soft oils with crude soft oil imports seen as more commercially viable.