Refiners bought more than 200,000 tonnes of crude palm oil in a week as lower import duties and preparations for Diwali and wedding-season demand prompted a rush to replenish stocks.
India’s appetite for palm oil has picked up sharply after New Delhi cut import duties on edible oils, with refiners moving quickly to rebuild stocks ahead of the country’s busiest consumption period, according to Bloomberg. Aashish Acharya, vice president at Patanjali Foods, said buyers had taken in more than 200,000 tonnes of crude palm oil in the past week as inventories among distributors and other downstream buyers thinned out. The rush comes as traders position for Diwali and the wedding season that follows, both of which typically lift demand for cooking fats used in sweets, snacks and fried foods.
The buying surge follows a broader policy shift by the Indian government, which on 24 September reduced the basic customs duty on crude palm oil and crude soybean oil to 5 per cent from 10 per cent, while removing the duty on crude sunflower oil, according to a press release from the government of India. Duties on refined edible oils were also cut, although the government said it was preserving a wider gap between crude and refined products to encourage domestic processing. Officials said the changes were designed to ease inflation in household food costs and encourage companies to pass on the savings to consumers.
That policy backdrop matters because India is one of the world’s most important edible-oil import markets and relies heavily on overseas supplies, Reuters reported in a story republished by MarketScreener. Reuters said Indian vegetable oil prices had risen by nearly 20 per cent over the year, raising pressure on policymakers to act before the festive season. Business Standard and the Indian Express both reported that the lower duties were intended to reduce landed costs for importers and help support consumption at a time when food inflation had been running elevated. For palm oil exporters and global futures markets, the renewed Indian buying could offer a welcome near-term lift.
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