According to Dealers, India purchased 300,000 metric tons of soyoil from Argentina. Notably, this is the highest ever soyoil purchase in a two-day period, taking advantage of Buenos Aires’s act to scrap export products.
The massive soyoil purchases will support Argentina in cutting its soyoil stocks, but could also indicate that fewer palm oil shipments from Indonesia and Malaysia to India. The dealers said that the soyoil purchases are for the October-March shipment, but the details remain unclear since the deals were made by private trading houses.
Volume of Soyoil purchases is unprecedented
“The volume purchased in such a short period has never been purchased before” said a New Delhi-based dealer with a trade house, as traders largely ignored palm oil. On Monday, Argentina temporarily scrapped export taxes on several farm commodities, such as soybeans, in an attempt to increase overseas sales and bring in much-needed U.S. dollars to support its weakening peso.
India, the world’s biggest buyer of vegetable oils, typically imports just under 300,000 tons of soyoil a month, and the size of this week’s purchase highlights the impact of Argentina’s decision, the dealers said.
Furthermore, they asserted that soyoil purchases carry at $1,100 to $1,120 a ton, including cost, insurance, and freight (CIF).
Not only this, one of the dealers added that as prices corrected by nearly $50 following the duty exemption, Indian buyers rushed to make purchases, finding it cheaper than palm oil”. According to the leading trade body, the Solvent Extractors’ Association of India, India’s soyoil imports dropped 25.27% to a four-month low of 367,917 tons in August. India purchases palm oil mainly from Indonesia and Malaysia, whereas it sources soyoil and sunflower oil from Argentina, Brazil, Russia, and Ukraine. Demand for edible oils, especially palm oil, in India usually rises during the festival season due to higher consumption of sweets and fried foods.