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India’s palm oil imports from Thailand in May have increased by almost ten times from a month before as Thai-origin palm oil has become more price-competitive than Indonesian and Malaysian supplies, although by a slim margin.
More than 90,000 mt of Thai palm oil arrived in India by May 21, a market source told S&P Global Platts.
India is the largest buyer of palm oil in the world and relies almost completely on Indonesia and Malaysia for its monthly supply of 650,000-750,000 mt, principally for cooking, confectionery, soaps and cosmetics.
“Thai-origin palm oil was cheaper by $10/mt compared to its larger rivals…India is a price sensitive market,” Sandeep Bajoria, CEO of Sunvin Group, a Mumbai-based vegetable oil brokerage said.
However, he pegged total Thai imports slightly lower at 75,000 mt in May.
For perspective, India’s imports of crude palm oil (CPO) from Thailand in April 2021 were recorded at 8,206 mt, data from India’s vegetable oil industry body, the Solvent Extractors’ Association of India (SEAI) showed.
Prior to this, India did not import any Thai palm oil between January and March, SEAI data showed.
“I do not think this high [spike in Thai-imports] will be seen in the coming months as Indonesia’s production is rising and it will get competitive again,” Bajoria said when asked if India’s purchases from Thailand will carry on at a similar pace.
SEAI will release May supply and demand data on June 12.
Palm, soybean and sunflower oils are currently trading around 13-year highs due to supply and demand constraints, which has forced bulk buyers to pare down stocks and consumers to shell out more for the essential commodity.
Prices have been further aggravated by progressive tax slabs set by Indonesia and Malaysia which increase incrementally as reference prices of palm oil cross per-determined thresholds. Notably, Indonesia also has an additional progressively increasing export levy on palm oil.
India, with a per capita vegetable oil consumption of 19 kg — one the highest in the world — has been particularly hard hit. On May 24, senior government officials met with industry trade bodies to take stock of the situation and look for solutions to ease the pressure on customers.
Indian traders are currently in a wait-and-watch mode as there is market chatter that a cut to Indonesia’s $255/mt export levy may be announced in the coming weeks, multiple sources told S&P Global Platts. However, there is no official announcement yet.
Thailand is the third-largest producer of palm oil. However, it accounts for only 3% of the global production, while Indonesia and Malaysia account for 85% of the world’s estimated annual production of roughly 73 million mt.
Source: www.hellenicshippingnews.com