Record Imports: India’s July edible oil imports are expected to reach a record 1.86 million metric tons, which is nearly 60% higher than the normal level. This surge in imports is attributed to refiners increasing purchases to build stocks for upcoming festivals.
Palm Oil Imports: July palm oil imports are projected to rise by 46% compared to the previous month, reaching 1 million tons. This would be the highest import level in seven months.
Sunflower Oil Imports: India’s sunflower oil imports are expected to double in July compared to the previous month, reaching 385,000 tons. This would be the highest import level in six months.
Soybean Oil Imports: July soybean oil imports are seen increasing by 9% compared to the previous month, reaching 475,000 tons. This would be the highest import level in a year.
Reasons for Increased Imports: The uncertainty over supplies from the Black Sea region, particularly due to the Russia-Ukraine crisis, has prompted importers in India to build up stocks of edible oils. This is to ensure sufficient availability during the festive season and to mitigate potential supply disruptions.
Impact on Global Markets: India’s higher imports could help reduce palm oil stocks in Malaysia and Indonesia and support benchmark futures, which have been trading near their highest level in 4-1/2 months. Additionally, the increased demand for soybean oil could aid key sunflower oil-producing Black Sea countries in reducing their inventories.
Historical Context: In 2022, prices of all edible oils soared to record highs after sunflower oil supplies from the Black Sea region were disrupted following Russia’s invasion of Ukraine.
Unusually High Imports: The notable aspect of this month’s imports is that all edible oils are experiencing a surge in demand. Typically, when palm oil imports increase, soyoil and sunflower oil imports decrease, and vice versa. However, in July, imports of all edible oils are rising simultaneously.
Overall, the significant increase in India’s edible oil imports for July is driven by stock-building measures amidst geopolitical uncertainties in the Black Sea region, along with rising demand during the festive season.