India’s Vegetable Oil Imports Surge in May, Driven by Palm Oil Demand

Image Source : ET Retail

India’s vegetable oil imports rose sharply in May, reaching 1.19 million tonnes, a significant increase from 0.89 million tonnes in April. The surge was primarily driven by higher palm oil imports, which saw an 84 percent month-on-month rise, alongside steady growth in sunflower and soyoil imports.

Key highlights of the import trends
- Palm oil imports jumped to 592,888 tonnes in May, up from 321,446 tonnes in April, marking the highest level since November 2024.
- Sunflower oil imports remained stable at 183,555 tonnes, reflecting a slight increase from 180,128 tonnes in April.
- Soyoil imports rose to 398,585 tonnes, a 10.4 percent increase from April’s 360,984 tonnes.
- The overall vegetable oil imports in May saw a 33 percent rise compared to the previous month, driven by lower inventories and competitive pricing.

Market dynamics and influencing factors
- The price advantage of palm oil over soyoil and sunflower oil encouraged refiners to boost purchases.
- Below-average imports from January to April led to a decline in domestic vegetable oil stocks, prompting higher imports in May.
- India’s decision to halve the basic import tax on crude edible oils to 10 percent is expected to further support demand in the coming months.

Outlook for June and beyond
- Palm oil imports are projected to rise further in June, potentially reaching 850,000 tonnes due to continued price advantages.
- Soyoil imports are expected to remain steady at around 400,000 tonnes.
- The vegetable oil market is likely to see sustained growth as refiners respond to evolving price trends and inventory levels.

India’s role in the global vegetable oil trade
India is the world’s largest buyer of vegetable oils, sourcing palm oil primarily from Indonesia and Malaysia, while importing soyoil and sunflower oil from Argentina, Brazil, Russia, and Ukraine. The country’s import trends significantly impact global edible oil markets, influencing pricing and trade flows.

Sources: Solvent Extractors' Association of India, Economic Times, Business Standard.