India's edible oil imports in August rose 5% to a record 1.85 million metric tons as refiners purchased more than 1 million tons of palm oil for the second consecutive month to build stocks for upcoming festivals, four dealers told Reuters.
Higher purchases by the world's biggest importer of vegetable oils could help to lower palm oil stocks in Indonesia and Malaysia and support benchmark futures. The buying has helped strengthen soybean oil futures and could reduce inventories in sunflower oil-producing Black Sea countries.
India's average monthly edible oil imports in the 2021/22 marketing year were 1.17 million tons, trade body Solvent Extractors' Association of India (SEA) said. In July, India imported 1.76 million tons, which was also a record high.
Palm oil imports increased from 1.09 million tons in July to 1.12 million tons in August, the highest in nine months, according to average estimates from the dealers.
The SEA is likely to publish its August vegetable oil import data by mid-September.
"Refiners were making aggressive buying for the upcoming festival season," said Rajesh Patel, managing partner at GGN Research, an edible oil trader and broker.
"Retail demand was moderate, but the industry is expecting it would pick up in coming months."
Sunflower oil imports jumped by 11.5% from a month earlier to 365,000 tons, the highest in seven months, while soyoil imports edged up 3.7% to 355,000 tons, dealers estimated.
As the discount of palm oil relative to soyoil and sunflower oil continues to widen, refiners are increasing their purchases in anticipation of demand during the upcoming festivals, said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
August imports surged because a few vessels initially intended for unloading in July at Kandla port were eventually offloaded in August due to port congestion, said a New Delhi-based dealer with a global trading house.
Concerns over local soybean and groundnut production due to the dry weather are also prompting refiners to import more edible oils, the dealer added.
India experienced its driest August in more than a century, with the country receiving 36% less rainfall than normal during the month.
Source Name : Economic Times