India’s oilseed surplus threatens vegetable oil imports
India’s record large oilseed stockpile looks set to finally dribble into the market in the next few months as forecasts for normal monsoon rains prompt speculators to release stocks and reduce vegetable oil imports.
India, the world’s biggest importer of edible oil, still has about 70% of this year’s oilseed output of around 26 million tonnes to process, but crushing will pick up from June as forecasts of ample rains promise plentiful supply next year.
Higher oilseed crushing in the third quarter, usually India’s peak edible oil import season, will limit the need for overseas purchases and possibly have a bearish impact on benchmark Chicago soya oil and Malaysian palm oil markets.
Crushing later than normal
India typically finishes crushing two-thirds of its domestic oilseeds harvest by April, relying mainly on imported cargoes in the second and the third quarters.
But this year will be different. Traders said India’s edible oil imports — chiefly palm oil from Southeast Asia and soya oil from Latin America — could slide to 1.5 million to 1.6 million tonnes in the period from July to September, down 20% to 25% from a previously estimated two million.
"Normally, most of the crushing takes place in the first six months of the season, but this year we have a lot of stock which will be crushed now," said a vegetable oil trader based in Mumbai, the country’s financial capital.
