India palm imports drop from 10-month high on weak food demand

Palm oil imports by top buyer India probably fell from a 10-month high as a slow recovery of the food services industry curtailed demand for the world’s most-used vegetable oil.

Inbound shipments fell 11% to 734,000 tons in August from a month earlier as traders and refiners cut back purchases after replenishing reserves in July, according to G.G. Patel, managing partner of GGN Research. That compares with 852,534 tons in August 2019.

A drop in purchases by India could boost stockpiles in top growers Indonesia and Malaysia. That may curb gains in palm oil prices that have rallied about 22% so far this quarter on optimism for steadily rising demand of the tropical oil used in everything from chocolate to ice-cream and shampoo.

Read: Palm Oil Stockpiles in Malaysia Set to Climb on Export Slump

Palm oil consumption by restaurants and hotels suffered in India after the government imposed the world’s most stringent stay-at-home rules in March to curb the spread of the coronavirus among its 1.3 billion people. The restrictions are gradually being lifted.

Soybean oil imports in August are estimated to have dropped to about 391,000 tons from 484,525 tons a month earlier, Patel said, while purchases of sunflower oil fell to about 158,000 tons from 208,747 tons. India’s total edible oil imports probably slumped to 1.3 million tons compared with 1.52 million tons in July, Patel said.

Palm oil imports probably totaled about 800,000 tons in August, according to Sunvin Group, a Mumbai-based broker and industry consultant. Soyoil purchases were 410,000 tons while inbound shipments of sunflower oil were 160,000 tons, it said.