India buys record soyoil from China in rare move, sources say

MUMBAI: Indian importers have bought a record 150,000 metric tons of soyoil from China in rare purchases, as a supply glut prompted Chinese crushers to sell at a discount to India’s traditional suppliers from South America, four trade sources said.

The exports to India will help Chinese crushers cut inventories that surged after the country’s soybean imports hit a record peak in May, boosting processing and stockpiles while demand slowed. China is the world’s biggest importer of soybean.

Indian importers bought the soyoil for shipment between September and December, with sellers offering a $15 to $20 a ton discount compared with South American supplies, said the sources who declined to be named because they were not authorised to speak to the media.

“Chinese soybean crushers are struggling with excessive soymeal and soyoil. To reduce inventories, they are shipping oil to India,” a New Delhi-based dealer with a global trade house told Reuters.

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India, which mainly imports soyoil from Argentina and Brazil, began buying from China due to the price advantage, the dealer said. China is traditionally a net importer of soyoil and palm oil.

Chinese crushers offered crude soyoil at around $1,140 per ton, including cost, insurance, and freight (CIF), for shipments in the December quarter, compared with $1,160 from South America, another dealer said.

Lower freight costs have given China the upper hand too, as shipments from South America take more than six weeks to reach India, while those from China arrive in two to three weeks, a Mumbai-based dealer said.

India meets nearly two-thirds of its vegetable oil demand through imports – by private companies – of palm oil, mainly from Indonesia and Malaysia, as well as sunflower oil and soyoil from Russia and Ukraine in addition to Argentina and Brazil.

In India and elsewhere, soyoil is trading at a premium over palm oil, but in China, soyoil is trading at a discount due to the supply glut, a Kuala Lumpur-based dealer said.

India’s annual cooking oil requirement is huge, and it could buy even more from China if offered at competitive prices, said Sandeep Bajoria, chief executive of the Sunvin Group, a Mumbai-based vegetable oil brokerage.