Negative margin likely to cause sharp fall in palm oil imports in January

18-Jan-2025 11:29 AM

The sharp decline in palm oil imports to India in January 2025 is attributed to a negative refining margin, which has made palm oil less attractive compared to other oils like soybean oil and sunflower oil.

As a result, Indian refiners are prioritizing the import of crude soybean oil instead of crude palm oil (CPO).

The forecast suggests that palm oil imports in January 2025 could drop to around 3.70 lakh tonnes, marking the lowest level in the past five years, compared to an average of over 7.50 lakh tonnes per month in 2023-24.

The reduced imports are expected to exert downward pressure on Malaysia's palm oil futures prices, while soybean oil futures on the Chicago Exchange are likely to see an uptick.

Despite no delays in clearance at major ports like Kandla, Haldia, and Krishnapatnam, the number of ships arriving with palm oil is significantly lower, further contributing to the import decline.

The import pattern is expected to be slightly higher in the second half of the month, but the total for January will remain under 3.70 lakh tonnes.