MUMBAI: India’s palm oil imports could fall 19% to the lowest level in 11-years as soyoil, now cheaper, takes more market share because of Indonesia’s curbs on palm oil exports and New Delhi’s move to allow duty-free imports of soyoil, dealers said.
Lower palm oil purchases by the world’s biggest vegetable oil importer could put pressure on Malaysian palm oil prices and may lift soyoil imports to record highs and support U.S. soyoil futures prices.
India’s palm oil imports in the 2021/22 marketing year, ending on Oct. 31, could fall to 6.7 million tonnes, the lowest since 2010/11, according to the average forecast from five dealers.
Soyoil imports in the year could jump 57% from a year before to a record 4.5 million tonnes, they said.
India on Tuesday allowed duty-free imports of 2 million tonnes each of crude soyoil and crude sunflower oil for the current and next fiscal years, ending March 31, as part of efforts to keep a lid on local edible-oil prices.
“The duty structure has made buying soyoil more attractive than palm oil,” said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and consultancy firm.
Other dealers agreed.
Crude palm oil was being offered in India at about $1,775 a tonne, including cost, insurance and freight, for June shipments, compared with $1,845 for crude soybean oil.
But since the crude palm oil attracts 5.5% import tax, the effective price for Indian buyers is $1,873, said Bajoria.
Indonesia allowed the resumption of palm oil exports from Monday after a three-week ban, but industry players said shipments were unlikely to restart until details emerged on how much of the edible oil must be held back for domestic use.