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(Bloomberg) — India, the world’s top edible oil importer, has canceled more soybean oil cargoes as costs for the product have risen sharply compared with alternatives.
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About 25,000 tons booked from Russia, as well as around 6,000 to 8,000 tons from South America, have been axed in recent days as soy oil’s premium to palm oil rises, according to Aashish Acharya, vice president at Patanjali Foods Ltd., one of the country’s top buyers. The Russian cargoes were meant to arrive in India by late March or early April, while the South American supply was for the April to July period, he said.
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Several other vegetable oil traders confirmed the development to Bloomberg.
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The moves add to a recent string of cancellations by traders in the nation. India scrapped about 70,000 tons of South American soy oil last week and had backed out of at least 35,000 tons in January as the rupee’s slump made imports more expensive. In December, buyers scrapped or delayed more than 100,000 tons of Argentinian deals.
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This round of so-called washouts was also due to a disparity of about $30 to $40 per ton between imported and local prices, said Sandeep Bajoria, chief executive officer of Mumbai-based Sunvin Group.
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Soybean oil is trading at the steepest premium to palm — its closest substitute in food and fuel — since 2023. The market has also been jolted this week as US attacks in Iran disrupt energy supplies from the Middle East, lifting prices as biodiesel demand rises.
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“Palm oil is a cheaper option for buyers looking for replacements,” Acharya said. “We could see more Indian purchases of palm oil in the coming days, as nearby shipments of palm oil is available at around $60-$70 cheaper compared to soybean oil.”
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