India, the world's largest importer of vegetable oils, significantly reduced its oil imports in September 2024. Driven by high global prices and substantial domestic reserves, the country’s imports fell by more than 30%, with palm oil and sunflower oil hitting multi-month lows.

India Cuts Vegetable Oil Imports by Over 30%

According to the Indian Solvent Producers Association (SEA);

• India’s vegetable oil imports in September dropped to 1.1 million tons, marking a sharp 30% decrease from August.
• Palm oil imports saw the largest decline, down by over 33% to a six-month low of 527,314 tons.
• Sunflower oil imports fell even more drastically, decreasing by 46.2% to a 10-month low of 152,803 tons.
• Soybean oil imports also took a hit, dropping by 15.4% to 384,382 tons.

Factors Behind the Decline: High Prices and Local Reserves

SEA experts attribute the drop in palm oil imports to a combination of factors, including significant local reserves and rising base prices in Malaysia, one of India’s key suppliers. As India has built up its stock of vegetable oils, the need for further imports has diminished, especially amid higher global prices.

Global Impact: Pressure on Palm Oil Prices in Malaysia and Indonesia

The reduction in Indian palm oil imports could have broader implications for the global market. Malaysia and Indonesia, the world's largest palm oil producers, are likely to experience increased stockpiles as demand from India slows. This buildup in supply could place downward pressure on palm oil prices in the coming months.

Indian Vegetable Oil Stocks Decrease

Despite the lower imports, India’s stock of vegetable oils shrank in September, falling from 2.93 million tons to 2.45 million tons, according to SEA data. However, local demand is expected to pick up soon.

Festival Season Likely to Drive October Imports Higher

As the festive season approaches, India’s demand for edible oils is on the rise. Local analysts predict that palm oil imports could surpass 700,000 tons in October to meet the increased consumption. This seasonal demand may temporarily reverse the decline seen in September.

Key Suppliers: Palm, Soybean, and Sunflower Oil Origins

India primarily sources palm oil from Indonesia, Malaysia, and Thailand. Meanwhile, its soybean and sunflower oil imports come from Argentina, Brazil, Ukraine, and the Russian Federation.

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