MUMBAI - India's palm oil imports for the next four months are expected to fall as high prices prompt buyers to shift to rival oils such as soyoil and sunflower oil, industry officials said.
Malaysian palm oil futures have jumped 27% in five weeks to 2,760 ringgit ($661.87), the highest in two years, on prospects of lower production and stockpiles.
India is the world's biggest buyer of edible oils and palm oil corners the bulk of the market share due to its relatively lower prices. But rising prices of palm oil 1FCPOc3 prompt consumers to turn to soyoil and sunflower oil that are considered more beneficial for health.
Palm oil's discount to soyoil BOc1 for January shipments has narrowed to less than $90 per tonne from $205 in July 2019, said a Mumbai-based importer.
"Some shift is happening towards soyoil and sunflower oil from palm oil due to narrowing price difference," said Sandeep Bajoria, chief executive of Sunvin Group, a Mumbai-based vegetable oil importer.
India's monthly palm oil imports from December to March could be between 700,000 tonnes to 740,000 tonnes, down from average imports of 783,000 tonnes in the marketing year ended on October 31, according to a survey of six industry officials.
The country's combined imports of soyoil and sunflower oil could rise to 500,000 tonnes to 550,000 tonnes during the period from 453,000 tonnes in the last marketing year, they said.
India mainly imports palm oil from Indonesia and Malaysia and soyoil from Argentina and Brazil. It also buys sunflower oil from Ukraine and small volumes of canola oil from Canada.
India's palm oil imports could drop to 9.4 million tonnes in the 2019/20 marketing year started on Nov. 1, down from an earlier estimate of 9.7 million tonnes, said Govindbhai Patel, managing director of trading firm G.G. Patel & Nikhil Research Company.
In the next few months palm oil imports could also get squeezed in winter, Govindbhai said, when household palm oil consumption falls in India as it solidifies at lower temperatures.
Soyoil imports in the current marketing year could rise above 3.3 million tonnes from last year's 3 million tonnes, said a Mumbai-based dealer with a global trading firm.
"The domestic soyoil supplies are limited due to a drop in the soybean production. This shortage could have been met with palm oil, but it has become expensive," he said.
India's soybean production is expected to have fallen below 9 million tonnes in 2019 from 10.3 million tonnes a year ago due to erratic weather. ($1 = 4.1700 ringgit)
(Reporting by Rajendra Jadhav; Editing by Emelia Sithole-Matarise) ((email@example.com; +91-22-68414378 ; Reuters Messaging: firstname.lastname@example.org))