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Rising prices slow down imports of palm oil by major consumers from India and China

Published Mar 5, 2022

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The world's largest buyers of palm oil, China and India, are slowing imports as prices soar to historic highs, oilworld.ru reports citing Reuters. The underlying price of crude palm oil in Malaysia has risen 45% this year, fueled by labor shortages, export restrictions by Indonesia's largest producer, and disruptions in supplies of sunflower oil from the Black Sea region.

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“We have passed the tipping point and now we are at the boiling point,” Sudhakar Desai, President of the Indian Vegetable Oil Producers Association (IVPA), told an industry webinar. According to Desai, the Ukrainian crisis caused panic in the market. India's stocks of cooking oil are covered for about 45 to 50 days, after which companies will find alternatives to sunflower oil, but their purchase of expensive palm oil will be "limited and cautious," he said. Soybean and mustard seed processing rates in India will increase to meet demand, Desai said, adding that "India is not going to build up stocks." He estimated the country's 2021/22 palm oil imports at 7.63 million tons, up from 8.89 million tons in 2020/21. China's palm oil imports are also expected to be flat in 2022, at 6.7 million tons from 6.63 million tons a year earlier, according to Desmond Ng, Malaysian Palm Oil Council's chief spokesman for China. “China is in dire need of replenishing vegetable oils. Demand should be ...
Source: Oilworld
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