India's soyoil imports are set to hit a record high in August. Competitive prices are pulling refiners toward soyoil. At the same time, Russia-Ukraine war disruptions to Black Sea shipments are pushing buyers away from sunflower oil, dealers told Reuters.
Key Facts
- Soyoil imports could hit a record 620,000 tons in August, up 46% from this year's monthly average.
- Down 28% from July, sunflower oil imports may fall to 180,000 tons, the lowest since February.
- About 150,000 tons of Black Sea sunflower oil due in August-September has been delayed by the war.
Soyoil imports in August are likely to reach 620,000 tons, four traders directly involved in the deals estimated. The volume is nearly 46% above the average monthly pace of 424,549 tons so far this marketing year, which began in November.
"Soyoil prices are very competitive," said Sandeep Bajoria, chief executive of Sunvin Group, a Mumbai-based vegetable oil brokerage. Disruptions to sunflower oil shipments are making soyoil even more attractive, he added.
Soyoil's premium over palm oil narrows to $50 a ton
Soyoil now costs about $50 a ton more than palm oil, per a New Delhi-based dealer. This premium has narrowed from more than $100 in April. Palm oil prices have climbed on concerns that unfavourable weather could cut production, and on Indonesia's push to use more palm oil in biofuels.
The narrower premium is making soyoil more attractive to price-sensitive Indian buyers, the dealer noted.
Russia-Ukraine war disrupts Black Sea sunflower oil shipments
Black Sea port and maritime infrastructure have come under growing attack from both sides in recent months, cutting export capacity for grain and vegetable oil shipments alike.
Russia and Ukraine account for most of India's sunflower oil imports. Those imports are likely to fall to 180,000 tons in August, the lowest level since February. The decline would also mean a 28% drop from July, dealers estimated.
About 150,000 tons of Black Sea sunflower oil due in August and September have been delayed by the conflict, one dealer noted.
Sunflower oil is usually the preferred choice in southern India, but supply disruptions are steering buyers toward soyoil instead. Kandla and JNPT on India's west coast are already receiving soyoil cargoes. The southern ports of Krishnapatnam and Kakinada are now also taking soyoil shipments, one dealer added.
India's soyoil buying extends into December
"Indian imports are likely to exceed 600,000 tons even in September," a New Delhi-based dealer told Reuters.
Forward bookings already total close to 1.4 million tons of soyoil for shipment from September through December. Ample soyoil supplies and competitive prices are prompting India to buy ahead. Dealers cited concerns that an El Niño weather pattern could hurt local oilseed production.
Argentina and Brazil are normally the biggest sources of Indian soyoil. For prompt shipments, refiners are now also turning to:
By October through December, soyoil and palm oil are landing in India at almost identical prices. Sunflower oil is fetching a premium of close to $200 a ton over the same stretch, the dealer added. The same figures were carried by ESM Magazine. India buys palm oil mainly from Indonesia, Malaysia and Thailand.
