India's palm oil imports in July are set to jump to the highest in 10 months because of a hefty correction in prices and as Indonesia allows more exports of the tropical oil, four dealers told Reuters.
Higher purchases by India, the world's biggest importer of vegetable oils, may add support for Malaysian palm oil prices, which are trading near a one-year low.
India's palm oil imports in July may rise to 700,000 to 800,000 tonnes, the highest since September 2021, the dealers said.
"Palm oil has become very attractive for Indian buyers after the recent fall in prices," said one of the dealers, Sandeep Bajoria, the chief executive of vegetable oil brokerage and consultancy Sunvin Group.
Malaysian palm oil futures tumbled 10% on Wednesday to a near one-year low, on fears of rising stockpiles and a sell-off in commodities because of concerns that demand may fall in a potential global recession.
Indian buyers contracted to purchase nearly 250,000 tonnes of palm oil for prompt shipment last week, but this week's drop in prices has confused many buyers and they are waiting for prices to stabilise, said another one of the dealers, who is based in New Delhi with a global trading firm.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while soyoil is mainly sourced from Argentina, Brazil and the United States. India imports sunflower oil from Ukraine and Russia.
Palm oil's discount has widened over rival oils and it has again become competitive, said a Mumbai-based dealer with a global trading firm.
Crude palm oil (CPO) was being offered in India at about $1,100 a tonne, including cost, insurance and freight (CIF), for July shipments, compared with $1,360 for crude soybean oil.
Crude sunflower oil was offered at around $1,675 a tonne on a CIF basis, the dealers said.
In the past few months palm oil imports plunged as supplies were not enough, but now Indonesia has been supplying enough quantity, the Mumbai-based dealer said.
Indonesia has raised its palm oil export quota to reduce soaring inventories of the edible oil and as of Monday issued export permits for a total of 2.4 million tonnes of palm oil products.
"Palm oil imports even in August and September would remain robust if prices remain around the current level," the New-Delhi based dealer said.