India's Palm Oil Imports Plummet in August Amid Stock Surplus and Negative Margins

India's palm oil imports saw a sharp decline of 26% in August compared to July, driven by sufficient domestic stocks and negative margins that deterred refiners. The drop contributed to a reduction in total edible oil imports, with potential impacts on key producers like Indonesia and Malaysia.

India's palm oil imports in August fell by more than a quarter compared to the preceding month, driven primarily by adequate domestic stocks and unfavorable margins, according to a leading trade body on Thursday. This trend could lead to higher stock levels in leading producers Indonesia and Malaysia, affecting benchmark futures.

The Solvent Extractors' Association of India (SEA) reported that palm oil imports dropped 26% in August from July, amounting to 797,482 metric tons. Soyoil imports increased by 16% to 454,639 tons, while sunflower oil imports declined by 22.5% to 284,108 tons.

The decline in palm and sunflower oil imports resulted in a 17% reduction in India's total edible oil imports, which fell to 1.53 million tons. A New-Delhi based dealer noted that refiners are opting for soyoil over palm oil due to the higher costs associated with palm oil.

Typically sold at a discount to soft oils, palm oil was offered at a $40 per ton premium over soyoil for September shipments, according to the SEA. Excessive purchases in July led to a stock buildup, contributing to lower imports in August.

Despite the reduction, vegetable oil stocks rose to 2.93 million tons on September 1, the highest in nine months. Rajesh Patel of GGN Research suggested that India's edible oil imports could decrease in September, with marginal increases in palm oil imports.

India sources palm oil from Indonesia, Malaysia, and Thailand, while soyoil and sunflower oil are imported from Argentina, Brazil, Russia, and Ukraine.

(With inputs from agencies.)