Palm oil imports expected to fall to a 14-year low in January

05-Feb-2025 03:42 PM

It looks like India's palm oil imports are facing a significant decline in January 2025, dropping to a 14-year low.

This trend is mainly driven by the price advantage of soybean oil, which has become cheaper and has encouraged Indian refiners to shift their focus toward importing more crude degummed soybean oil rather than crude palm oil (CPO).

As a result, palm oil imports are expected to decrease by around 46% compared to December 2024, reaching just 2.72 lakh tonnes—this marks the lowest import level since March 2011.

This shift comes after a period in which India imported an average of more than 7.50 lakh tonnes of palm oil each month during the 2023-24 marketing season.

The drop in palm oil imports has also contributed to a general decline in edible oil imports, which are estimated to have fallen by 15.6% to 10 lakh tonnes in January, the lowest in 11 months.

The situation seems to be exacerbated by the high cost of palm oil in key exporting countries like Indonesia, Malaysia, and Thailand.

Indian refiners have been facing negative margins when refining palm oil, which has pushed them to cut back on imports.

On the flip side, soybean oil and sunflower oil imports saw increases, with soybean oil imports reaching the highest level in seven months.

It’s an interesting shift in market dynamics, as price movements and refining margins are significantly influencing India's edible oil import strategy.