India’s vegetable oil imports cost a record $15.7 billion

The South Asian nation is the world’s biggest importer of edible oils, and higher purchases of palm oil, in particular could support benchmark Malaysian futures, now trading near a record high.

In volume terms, imports of 13.53 million tonnes for the 2020/21 marketing year ended on Oct. 31 were slightly higher than 13.52 million a year ago, the Solvent Extractors’ Association of India (SEA) said.

India’s palm oil imports in the year jumped 15.2% from a year earlier to 8.32 million tonnes, after the government moved to cut import taxes and allow shipments of refined palm oil, the trade body said in a statement.

To cut domestic prices of edible oil, New Delhi slashed import taxes on edible oils thrice in the past six months.

India’s imports of soyoil fell 15% to 2.87 million tonnes in 2020/21, while sunflower oil purchases plunged a quarter to 1.9 million tonnes, the trade body added.

India buys palm oil from Indonesia and Malaysia, with soyoil mainly imported from Argentina and Brazil. It purchases sunflower oil from Russia and Ukraine.

Its vegetable oil imports could fall slightly in the new marketing year, which started on Nov. 1, as domestic supply of oilseeds such as soybean, groundnut and rapeseed is set to rise, said B.V. Mehta, the executive director of the SEA.

“Demand destruction is also happening because of record prices,” Mehta told Reuters.

India’s imports of palm oil could fall In 2021/22, thanks to a sharp rise in its price in recent months, he said, which would make space for soyoil and sunflower oil.