India’s Palm Oil Imports in February 2023 Drops Due to Weak Demand

05 May 2023

India’s palm oil dropped around 30% from January to February 2023 as refiners preferred to lower their stocks and inventories piled up following excessive imports during October-January. According to a report, India imported palm oil worth USD 1576 million in Jan 2023, that dollar amount declined to USD 968 million in Feb month, however, March month reported a slight increase to USD 1257 million. Here is a picture of India’s palm oil import market with an in-depth analysis.

The rapid rise in consumerism has led to increased demand for cosmetics, personal care products, household goods, and packed food & beverages. This trend is creating lucrative opportunities in non-food applications as well. Moreover, rising demand for these consumer products is subsequently driving demand for derivatives usages in palm oil, fatty acids, glycerin, and other similar products manufacturing.

The palm oil industry in India is highly dependent on imports from Southeast Asian countries, particularly Indonesia and Malaysia, which together account for 90% of the overall imports. Palm oil constituted to a large portion of edible oil imports in India with crude palm oil accounting for nearly 50% of the imports while refined palm oil accounted for about 20%. Food applications of palm oil largely constitute to the food manufacturing & processing industry. In view of palm oil’s dominance in oil imports and its lower pricing compared to other oils, demand for edible oils would further uplift palm oil consumption in India.  

India’s Palm Oil Imports in 2023

In Q1 of 2023, India imported palm oil worth USD 3,801 million. The February month saw a sharp decline in oil imports. The values of India’s palm oil imports in the first three months of 2023 are shown in the graphics.

India’s Palm Oil Imports Y-o-Y Comparison

India imported USD 15665 million worth of palm oil in 2021, that dollar amount increased to USD 20447 million in 2022. The year 2023 started with a record decline in palm oil imports, particularly in February month. Graphically analyze y-o-y comparison of India’s palm oil imports 2021-2023.

India’s Palm Oil Imports by Quarter

By quarterly comparison y-o-y, India’s palm oil imports totaled USD 2932 million in Q1 of 2021, which rose to USD 4306 million in Q1 of 2022 and declined to USD 3803 million in Q1 of 2023. The year 2022 reported the highest number of palm oil shipments that arrived in India from other countries, particularly Indonesia and Malaysia. Take a look at quarter-wise values of India’s palm oil imports from 2021 to 2023. 

India’s Palm Oil Imports by Origin Country

India’s major import sources of palm oil are Indonesia, Malaysia, and Thailand. The reduction in palm oil imports by India, the world’s biggest importer of vegetable oils, could weigh on Malaysian palm oil prices. On a y-o-y comparison basis, India’s imports of palm oil from Indonesia totaled USD 6810 million in 2021, USD 10229 million in 2022, and USD 1940 million in 2023 (Jan-Mar). Graphically understand India’s palm oil imports from Indonesia, Malaysia, Thailand, Papua New Guinea, and Nepal from 2021 to 2023.

India’s Palm Oil Imports by Month (Forecasted Values)

India’s imports of palm oil are expected to increase marginally in the second quarter of 2023 and fluctuate in the second half of the year. The market scenario in 2024 is also forecasted to be more or less same. Let’s graphically understand the India’s palm oil import market in future with forecasted values. 

India is the world’s largest importer of palm oil and its oil shipments mainly come from Indonesia, Malaysia, and Thailand. However, the country is planning to cut imports of palm oil due to concerns about oil affecting the health of people. Still, palm oil is used in manufacturing different products, particularly eatables, so India is majorly dependent on Indonesia and Malaysia for oil imports as both countries are the biggest producers and exporters of palm oil in the world.