Palm oil share in India's Edible Oil Imports Seen at 9-year LowHome

The share of palm oil in India’s growing edible oil imports is expected to drop to the lowest since 2005/06 in the current year to October, as a narrower discount for prices of the tropical oil versus that of rival soy oil hurts demand.

This shift in buying pattern at the world’s top palm oil importer could drag on benchmark prices that have shed 3 percent in 2015 amid ample global soy oil supplies. Weak Brent crude prices have also dragged by making palm an unattractive option for blending into biodiesel.

The share of palm oil in India’s total edible oil imports will drop to 65 percent, said Govindbhai Patel, a trade expert and managing director at GG Patel & Nihil Research Co. “Incremental demand has been shifting to soyoil,” he said.

The tropical oil accounted for as much as 86 percent of India’s edible oil imports in 2007/08 and 68 percent in 2013/14.

While palm purchases could rise 5.6 percent to 8.4 million tonnes this year, it would be a smaller fraction of total edible oil imports that are seen up nearly 12 percent at a record 13 million tonnes, Patel said.

Palm’s share in India’s vegetable oil imports was lower at 58 percent in 2005/06, according to data from the industry body Solvent Extractors’ Association (SEA).

India is the world’s top importer of edible oils, with palm from biggest producers Indonesia and Malaysia accounting for most of the purchases. But falling prices of soyoil that Indians consider superior due to health benefits is denting palm demand.

Source: Economic Times