India buys record amount of soybean oil from China
Indian importers have bought a record 150,000 tonnes of soybean oil from China, attracted by prices \$15–\$20/tonne lower than South American offers. A supply glut in China, due to record soybean imports and weak domestic demand, has prompted Chinese crushers to offload excess stock to India at competitive rates.
Indian importers bought a record 150,000 tonnes of soybean oil from China in a rare purchase as a supply glut forced Chinese crushers to sell to India’s traditional South American suppliers at a discount, four trade sources said.
Exports to India will help Chinese crushers reduce inventories that have surged since the country’s soybean imports hit a record high in May, allowing them to boost crushing and stockpiles amid weak demand. China is the world’s largest soybean importer.
Indian importers had been buying soybean oil for delivery between September and December, with sellers offering discounts of $15-$20 a tonne compared with South American shipments, the sources said, asking not to be named because they were not authorised to speak to the media.
“Chinese soybean crushers are struggling with excess soybean meal and soybean oil. “They are sending oil to India to reduce stockpiles,” a New Delhi-based dealer belonging to an international trading company told Reuters.
India, which imports soybean oil mainly from Argentina and Brazil, has started buying from China because of the price advantage, the dealer said. China is traditionally a net importer of soybean and palm oil.
Chinese crushers were offering crude soybean oil at around $1,140 a tonne, including cost, insurance and freight (CIF), for delivery in the December quarter, compared with $1,160 from South America, another dealer said.
Low shipping costs have also given China an advantage, as shipments from South America take more than six weeks to reach India, compared with two to three weeks for shipments from China, a Mumbai-based dealer said.
India meets nearly two-thirds of its vegetable oil demand through private imports of palm oil, mostly from Indonesia and Malaysia, and sunflower and soybean oil from Russia and Ukraine, as well as Argentina and Brazil.
In India and elsewhere, soybean oil sells at a premium to palm oil, but in China, soybean oil sells at a discount because of a glut of supplies, according to a Kuala Lumpur-based dealer.
India’s annual vegetable oil requirement is huge, and the country could buy more from China if it offered it at competitive prices, according to Sandeep Bajoria, CEO of Sunvin Group, a Mumbai-based vegetable oil brokerage.
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Source : Ukr Agro Consult
