India Reduces Edible Oil Imports to 3-Month Low

In December 2024, India’s edible oil imports fell to a three-month low of 1.19 million tonnes, marking a 25% decrease compared to previous months. Reduced purchases of palm and sunflower oil drove this decline, while soybean oil imports increased as Indian processors chose cost-effective alternatives.

Changes in Oil Import Patterns

Palm oil imports dropped by 40% to a nine-month low of 503,000 tonnes, while sunflower oil purchases fell by 22% to 265,000 tonnes. In contrast, soybean oil imports grew by 3% to a four-month high of 420,000 tonnes. Indian importers shifted focus to soybean oil as rising palm oil prices made it less affordable. Reduced inventories in November and December caused the surge in palm oil prices.

Impact on Global Markets

India, the world’s largest buyer of vegetable oils, significantly influences global markets. Experts expect the reduction in palm oil imports to lower base prices in Malaysia, while higher demand from India may push soybean oil prices upward in the United States.

Typically, palm oil costs less than soybean and sunflower oil. However, with current prices at $100 per tonne above soybean oil, Indian buyers continue favoring soybean oil. Sunvin Group predicts this trend will persist in January.

Domestic and International Supply Constraints

India meets its vegetable oil demand through imports from multiple sources. Indonesia, Malaysia, and Thailand supply palm oil, while Argentina, Brazil, and the United States provide soybean oil. Ukraine and Russia supply sunflower oil. Indian importers carefully monitor global prices and adjust strategies to manage costs and maintain domestic stability.

Conclusion

India's shift in vegetable oil imports showcases the country’s adaptability to global price dynamics. Rising palm oil prices and fluctuating inventories have prompted Indian buyers to explore cost-effective alternatives. This shift will continue shaping global oilseed markets in the months ahead.

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