India's sunflower oil imports surged by 51% in March, reaching 448,000 metric tons, the second highest level on record, due to its price advantage over palm oil. This increase comes as palm oil purchases dropped by 3.3% to 481,000 tons, marking the lowest since May 2023. The shift in buying preference was driven by higher palm oil prices, which have remained firm due to production challenges. Consequently, buyers opted for sunflower oil, which was more competitively priced, with crude palm oil (CPO) being offered at around $1,020 per metric ton compared to sunflower oil's $960 per ton for May delivery in India.
The narrowing price gap between palm oil and its alternatives like soyoil and sunflower oil led to this market shift. Usually, palm oil trades at a discount to these oils, but recent stock reductions have elevated its price above the others, despite their abundant supply. This price competitiveness of sunflower oil is expected to continue driving its higher imports into India during April and May. Meanwhile, soyoil imports also saw a significant increase of 27% in March, reaching 220,000 tons, although still below the previous year's monthly average.
The overall edible oil imports in India for March rose to 1.149 million tons, an 18.7% increase from the previous month, marking the highest level in six months. This rise in imports was predominantly due to the increased inflow of sunflower oil and soyoil, offsetting the decline in palm oil imports. India sources its palm oil mainly from Indonesia, Malaysia, and Thailand, while soyoil and sunflower oil are imported from countries like Argentina, Brazil, Russia, and Ukraine. The Solvent Extractors' Association of India (SEA) is expected to release the official data on March imports by mid-April.