As refiners ramped up purchases of rival soy oil to take advantage of New Delhi’s move to allow duty-free imports of the vegetable oil to calm all-time high prices, India’s palm oil imports fell 10% in July.
As the world’s largest edible oil importer increases purchases of U.S. soyoil, palm oil’s share of Indian purchasing will decline. This will force Malaysian and Indonesian sellers to offer discounts to regain market share.
In July, soy oil imports increased 125% to a record 519,566 tonnes, while sunflower oil imports rose 30% to 155,300 tonnes.
As part of efforts to keep local edible oil prices under control, India allowed duty-free imports of 2 million tonnes of soyoil and sunflower oil in late May.
In June, soy oil’s premium over palm oil was less than $150 per tonne. However, because palm oil attracts a 5.5% import tax, palm oil was more expensive for Indian buyers.
According to the SEA, the gap between palm oil and soy oil has widened above $350 per tonne in recent weeks, making palm oil purchases more attractive for refiners.
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