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INDIA - MUMBAI. India's palm oil imports in April fell 30% from a month earlier to hit a 14-month low, as its premium over rival soft oils prompted price-sensitive buyers to shift to sunflower oil and soyoil, five dealers told Reuters.
The surprise big drop in palm oil imports by India, the world's biggest importer of vegetable oils, could increase Malaysian stocks and weigh on palm oil prices trading near a seven-month low, they said.
It will also likely make it difficult for top producer Indonesia to increase exports after easing restrictions imposed on the shipments earlier this year, traders said.
India's palm oil imports fell to 508,000 tonnes last month, down from 728,530 tonnes imported in March, according to average estimates from the dealers.
Imports fell as buyers shifted to rival oils due to the price difference, said Rajesh Patel, managing partner at GGN Research.
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The average monthly imports in the first five months of 2022/23 marketing year that started on Nov. 1 were 879,000 tonnes, according to the Solvent Extractors' Association of India, which is likely to publish its April import data by mid-May.
Sunflower oil substituted palm oil as it was available at the same price or at a discount to palm oil, Patel said.
Sunoil usually commands premium over palm oil and was trading at a premium of as high as $500 per tonne in 2022.
"We were expecting palm oil imports of 650,000-700,000 tonnes for April but shipments fell to 500,000 tonnes," said a New Delhi-based dealer with a global trading house.
Indian buyers have opted to cancel 75,000 tonnes of palm oil purchases for the first time in many years and switch to rival soft oils for May shipments, including sunflower oil and soyoil.
Sunoil imports in April surged 69% from a month ago to 250,000 tonnes, while soyoil imports edged up 2.3% at 258,925 tonnes, the dealers said.
Palm oil has been losing market share in India at a rapid pace and will need to trade at a discount to soft oils to become bring back dominance, said Sandeep Bajoria, CEO Sunvin Group, a vegetable oil brokerage and consultancy firm.
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The oil's share in India's total imports fell below 50% in April for the first time since July 2022, dealers said.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
