India’s Edible Oil Dilemma: Palm Oil Shortage Sparks Import Shifts and Price Volatility
India faces a substantial 21.1% drop in edible oil imports, driven by a 27% decline in palm oil shipments amidst reduced availability due to biodiesel production in major producers Malaysia and Indonesia. While soyabean oil imports from Argentina surged, those from Brazil dwindled, reflecting shifts in the domestic biofuel industry. Import prices for key oils fluctuated in February, potentially influencing overall import costs.
Highlights
Significant Decline in Edible Oil Imports: India experienced a notable 21.1% drop in edible oil imports during the first four months of the 2023-24 oil year, primarily due to a 27% decline in palm oil shipments.
Palm Oil Shortage Due to Biodiesel Production: The decline in palm oil imports can be attributed to reduced availability as major producers like Malaysia and Indonesia are diverting it for biodiesel production, potentially leading to increased prices.
Outlook on Palm Oil Production: Palm oil output in Indonesia and Malaysia, key global producers, is expected to either marginally rise or decline in 2024 due to factors such as ageing plantations and limited expansion.
Shift in Soyabean Oil Imports: While imports from Brazil decreased, there was a sharp increase in soyabean oil imports from Argentina in February 2024, driven by domestic biofuel industry demands. Overall soyabean oil imports declined in the mentioned period.
Steady Sunflower Oil Imports: India’s import of sunflower oil remained relatively stable compared to the previous year, with notable imports from Romania, Russia, Argentina, and Ukraine.
Top Exporters to India: Indonesia and Malaysia were the primary exporters of palm oil to India during November-February 2023-24, while Argentina and Brazil were major sources of crude soyabean de-gummed oil.
Import Price Trends: CIF import prices for RBD palmolein, CPO, crude soyabean oil, and crude sunflower oil fluctuated in February compared to January, potentially impacting overall import costs.
Conclusion
India’s edible oil landscape is undergoing significant shifts, marked by a substantial decline in imports driven by a shortage of palm oil. With major producers diverting palm oil for biodiesel production, prices are expected to rise, posing challenges for the Indian market. The surge in soyabean oil imports from Argentina reflects the industry’s adaptability to changing supply dynamics. As import prices fluctuate, stakeholders need to remain vigilant to navigate the evolving market conditions and ensure a stable supply chain for India’s edible oil needs.
Source Link : https://in.investing.com/news/indias-edible-oil-dilemma-palm-oil-shortage-sparks-import-shifts-and-price-volatility-4067833
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