India’s aggressive vegetable-oil buying has led to congestion at major ports, delaying vessel unloading by as much as 10 days as shore tanks fill and refiners struggle to clear incoming cargo, industry officials told Reuters.
The congestion is expected to prompt Indian refiners to scale back purchases of soyoil and palm oil for October shipments, potentially boosting inventories in top producers Indonesia, Malaysia and Argentina and weighing on benchmark palm oil futures and soyoil futures.
The most severe congestion is at Kandla, which handles nearly a third of India’s edible oil imports. At least nine vessels carrying around 300,000 tonnes of edible oils are waiting to discharge. Congestion has also been reported at Haldia, the country’s second-largest gateway for edible oil imports.
India imported 1.54 million tonnes of vegetable oils in August, the highest volume in 11 months, with a similar amount expected in September. Refiners stepped up purchases for August and September delivery due to lower prices for prompt shipments and expectations of stronger seasonal demand during the festival period.
Lower demand from India could lead to higher inventories in major exporting countries and increase pressure on global palm and soyoil prices. India sources most of its palm oil from Indonesia and Malaysia, while soyoil and sunflower oil are imported mainly from Argentina, Brazil, Russia and Ukraine.
