3 days ago
India’s Tax Cuts Spur Palm Oil Restocking Ahead Of Festivals
India buys a lot of cooking oil from other countries.
The government recently lowered taxes on imported edible oils.
This made palm oil cheaper for Indian refiners and traders.
They bought more than 200,000 tons in one week.
Many businesses had low supplies and wanted to prepare for Diwali and the wedding season.
People often use more oil for festival foods, sweets, and restaurant meals.
India could buy even more if palm oil prices fall further.
These purchases could help support palm oil prices around the world.
Indian buyers purchased more than 200,000 tons of crude palm oil over the past week after import taxes were reduced.
The government halved the import levy on crude palm and soybean oils to 5% and removed duties on crude sunflower oil.
Distributors and downstream buyers have low inventories and are replenishing supplies before Diwali and the following wedding season.
India typically imports 500,000 to 650,000 tons of palm oil monthly, with purchases potentially reaching 750,000 tons if prices fall further.
Palm oil prices have declined amid robust production and weak exports, making palm the cheapest major edible oil for Indian buyers.
- Who
- Indian refiners, distributors, and downstream buyers, including buyers connected with Patanjali Foods Limited, are restocking palm oil.
- What
- India has increased palm oil purchases after the government reduced edible-oil import taxes.
- Where
- The purchases are being made in India, affecting the global palm oil market and benchmark futures in Kuala Lumpur.
- When
- The buying accelerated over the past week, ahead of the festival season from September through Diwali in November.
- Why
- Lower import taxes, depleted inventories, and expected seasonal demand for cooking oil have encouraged restocking.
Key facts
- Recent purchases
- More than 200,000 tons of crude palm oil were bought over the past week.
- Import levy
- The levy on crude palm and soybean oil imports was halved to 5%.
- Typical monthly imports
- India normally imports about 500,000 to 650,000 tons of palm oil per month.
- Potential peak purchases
- Monthly purchases could reach 750,000 tons if prices fall further.
- Seasonal demand
- Demand typically rises from September through Diwali in November.
- Price movement
- Palm oil futures fell to as low as 4,528 ringgit per ton, their lowest intraday level since July 14.
- Supply conditions
- Robust production and weak exports have raised concerns that inventories will increase.
Quotes
Aashish Acharya
Vice president at Patanjali Foods Ltd.
“If prices come down by another $40 a ton or so, India will buy more aggressively.”
theprint.in
“Palm is now the cheapest edible oil.”
theprint.in
Sources
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