India’s soyoil imports are set to hit a record high in August as competitive prices prompt refiners to boost purchases for festive demand, while disruptions to sunflower oil shipments due to the Russia-Ukraine war push buyers to switch oils, dealers said.
Soyoil imports in August are likely to rise to 620,000 metric tons, nearly 46% above the average monthly imports of 424,549 tons so far in the current marketing year, which began in November, according to four traders directly involved in trade deals. The traders did not wish to be named in line with their companies’ policies.
“Soyoil prices are very competitive. At the same time, there are disruptions to sunflower oil shipments. That is making soyoil even more attractive,” said Sandeep Bajoria, chief executive of Sunvin Group, a Mumbai-based vegetable oil brokerage.
In recent months, Russia and Ukraine have increasingly targeted each other’s port and maritime infrastructure in and around the Black Sea, disrupting grain and vegetable oil shipments and reducing export capacity.
Around 150,000 tons of sunflower oil originating from the Black Sea and scheduled for shipment in August and September have been delayed because of the conflict, one of the dealers said.
Buyers in southern India typically prefer sunflower oil, but import disruptions are prompting them to switch to soyoil, the dealers said.
Along with Kandla and JNPT ports on the west coast, Krishnapatnam and Kakinada ports in southern India are now receiving soyoil shipments, one of the dealers said.
Price advantage
The premium for soyoil over palm oil has narrowed to around $50 a metric ton from more than $100 in April, said a New Delhi-based dealer, as palm oil prices have risen on concerns that unfavourable weather could hit production and on Indonesia’s move to increase use of palm oil for biofuels.
The narrower premium is making soyoil more attractive to price-sensitive Indian buyers, said the dealer, who did not wish to be named in line with his company’s policy.
“Indian imports are likely to exceed 600,000 tons even in September. India has bought nearly 1.4 million tons for shipment between September and December,” he said.
Ample soyoil supplies and competitive prices are prompting India to step up purchases amid concerns that local oilseed production could be affected by an El Nino weather pattern, the dealer said.
Argentina and Brazil usually account for the bulk of India’s soyoil imports, but India is now sourcing the oil from destinations such as China, Egypt, Thailand and Turkey for prompt shipments.
India is buying soyoil even for shipments several months out, as the landed cost of palm oil and soyoil is nearly the same for October-December shipments, while sunflower oil is trading at a premium of nearly $200 per ton, the dealer said.
India imports palm oil mainly from Indonesia, Malaysia and Thailand.
