MUMBAI: India’s imports of palm oil jumped in September to their highest in a year, boosted by strong demand for the tropical oil ahead of the festival season and a steep discount to rival oils, six dealers told Reuters on Tuesday.
Greater buying could help top producer Indonesia cut swelling inventories and support benchmark Malaysian palm oil prices, which have nearly halved from this year’s record highs.
The September imports jumped 21% from a month ago to 1.2 million tonnes, the highest since September last year, the average estimate from six dealers with trading firms showed.
“Palm oil was much cheaper than other edible oils,” said Rajesh Patel, managing partner at GGN Research. “It was natural for refiners to increase buying.”
Palm oil is nearly $300 cheaper than rival soyoil for September shipments as Indonesia was trying to reduce its stockpile, dealers said.
Even in October, India’s palm oil imports will stay robust, at about a million tonnes, as its steep discount persists and festivals fuel demand strong, a Mumbai-based dealer with a global trading firm said.
Crude palm oil is being offered at $855 a tonne, including cost, insurance and freight (CIF) in India for October shipments, versus $1,207 for crude soyoil, the dealers said.
The Solvent Extractors’ Association of India, a trade body based in Mumbai, is likely to publish its September import data in the middle of October.
Soyoil imports in September rose 10% from a month ago to 270,000 tonnes, while those of sunflower oil jumped 22% to 165,000 tonnes, the dealers said.
Sunflower oil imports were rising as its premium over rival soyoil has narrowed after supplies from top exporter Ukraine resumed since August through a U.N.-brokered corridor, said Sandeep Bajoria, chief executive of leading broker Sunvin Group.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.