India’s vegetable oil imports to hit 14 million tonnes in 2022-23

The Indian Vegetable Oil Producers Association expects imports to increase by 3.5%

India is expected to import around 14 million tonnes of vegetable oil in the 2022-23 season beginning October 1, 2022, with palm oil taking up the bulk of imports at 8 million tonnes – a 3.5% increase from last year, according to the Indian Vegetable Oil Producers Association (IVPA).

Meanwhile, soybean oil imports are expected to fall by 11% to 3.6 million tonnes. With a market share eroded by an increase of sunflower oil imports, estimated to rise by 19% to 2.25 million tonnes in 2022-23, Mr. Sudhankar Desai, Chairman of IVPA, said during a presentation at the 25th Globoil Conference happening this week in Agra, India.

The expected increase in palm oil imports comes as palm oil prices have undergone a correction from the record highs seen earlier this year while enjoying a healthy discount against soybean oil which has capped buying recently.

Crude palm oil (CPO) prices are expected to trade at around $900-1,000 per tonne CNF India in the last quarter of 2022 and $1,000-1,150 per tonne CNF in Q1 of 2023, Mr. Desai noted.

This contrasts against soy oil at $1,200-1,350 per tonne CNF for the same period. At the same time, the increased availability of sunflower oil from the Black Sea region will also keep sunflower oil prices competitively priced against soybean oil, with Mr. Desai anticipating sun oil prices to range between $1,300-1,450 CNF India until March 2023.

Domestic consumption

India’s domestic consumption for 2022-23 is also expected to rise to 22.85 million tonnes, a 2.5% increment from last season after declining by around 7-8% in the last three years.

Total domestic supply in 2022-23 is expected to touch 11.83 million tonnes, on the assumption that India continues to enjoy a large domestic soybean and mustard crop, similar to 2021-22 levels.

A record mustard harvest and crushing in 2021-22 helped alleviate domestic pressures on cooking oil in India. This came at a time when vegetable oils were facing tight international supply, and prices were rising due to the Indonesian palm oil export ban earlier this year and the ongoing Russia-Ukraine war.

Mr. Desai also stressed a need for a better risk management tool for Indian buyers through the resumption of futures trading of crude soybean oil (CSBO) and crude palm oil (CPO) on India’s domestic exchanges, in view of the severe price volatility and large crop volumes seen this year.

The Securities and Exchange Board of India (SEBI) suspended futures and options trading in seven agri derivatives contracts – including CSBO and CPO – in December 2021 for a year.

In recent weeks, industry groups such as IVPA and the Solvent Extractors Association of India (SEA) have sought to have the suspension lifted to support risk management and price discovery.

For more information on the current veg oils market, take a look at our dedicated page for vegetable oil prices.

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