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India Bets on War's End, Halts Oil Buys
24 Mar
Summary
- Indian refineries reduce palm oil, soyoil, and sunflower oil purchases.
- Buyers anticipate a post-conflict price drop, holding ample global stock.
- India's reduced demand could cap Malaysian palm oil and U.S. soyoil prices.
Indian vegetable oil refineries have dramatically reduced their procurement of palm oil, soyoil, and sunflower oil. Industry officials indicate this move is a strategic bet that the price surge, exacerbated by the ongoing Iran conflict, is unsustainable.
Refiners believe that ample global inventory exists and that they can secure more favorable prices after the conflict ends. India, a major importer meeting two-thirds of its vegetable oil needs through imports, is expected to see its March imports fall to approximately 1.1 million tons.
This slowdown in Indian buying may cap the price gains of Malaysian palm oil and U.S. soyoil, while simultaneously bolstering domestic vegetable oil prices and supporting local oilseed farmers. Market sentiment remains cautious, with buyers adopting a wait-and-watch approach despite some recent price corrections.
