India has made the first canola oil purchase for delivery in August in almost five years as local prices have surged to a 3-and-half-year high, prompting a shift towards overseas imports, according to industry officials who spoke to Reuters.
Rajesh Patel, managing partner at GGN Research, a prominent edible oil trader, disclosed that a shipment of 6,000 tons of canola oil from the United Arab Emirates is en route to Kandla port in Gujarat this month. Traditionally, India primarily sources palm oil from Indonesia and Malaysia, while soyoil and sunflower oil are imported from countries such as Argentina, Brazil, Russia, and Ukraine.
The recent price spike in rapeseed oil, reaching 167,000 rupees ($1,914.02) per ton in July, represents the highest level since February 2022, marking a nearly 34% increase from the previous year. The surge in prices is prompting an increase in imports as dealers eye the potential for further shipments due to the delay in the arrival of the new local crop, which is not expected until March next year.
Furthermore, India's soyoil imports have been on the rise, with some consumers opting for the more affordable soyoil over the costlier rapeseed oil in response to the price differentials.
This strategic move comes amidst a challenging market environment, highlighted by the recent surge in edible oil prices and the ongoing pressure on local supplies. With the exchange rate converting to $1 equaling 87.2510 Indian rupees, the shift towards canola oil imports serves as a significant development in India's edible oil sector.
