EXCLUSIVE – India buys record US soybean oil amid South American drought Reuters – zimo news

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© Reuters. Combine harvesters are used to harvest soybeans on farmland in Chivilcoy, a suburb of Buenos Aires, Argentina, on April 8, 2020. REUTERS/Agustin Marcarian

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by Rajendra Jadhav

MUMBAI (Reuters) – Indian traders have pledged to import a record 100,000 tonnes of soybean oil from the United States as supplies tighten in arid South America and rival palm oil prices hit record highs, three traders told Reuters. .

Rising U.S. purchases should support U.S. soybean oil prices, which have surged nearly 20 percent this year to their highest levels in a decade, fueling inflationary concerns over food.

The world’s largest importer of edible oils traditionally buys soybean oil from Argentina and Brazil, but falling soybean production in the two major soybean exporters has forced New Delhi to turn to the United States, they said.

“Indian buyers bought U.S. soybean tankers. Prices in South America are attractive and supplies are low,” said an India manager at a global trading firm, who asked not to be named because of company policy.

“It is possible to buy two more ships in the short term. »

Two-thirds of India’s soybean oil demand typically comes from Argentina, with the rest from Brazil.

But a cut in soybean production last season has tightened supplies of Argentine soybean oil, forcing Indian buyers to seek alternatives, such as solar oil from the Black Sea region.

“Sunflower oil is cheaper than palm and soybean oil, but some buyers are skeptical about delivery due to geopolitical tensions (in Russia),” said Sandeep Bajoria, managing director of vegetable oil brokerage and consultancy Sunvin. Group.

“They choose soybean oil. »

Crude palm oil (CPO) for March shipments from India was quoted at around $1,575 a tonne including cost, insurance and freight (CIF), while crude soybean oil and crude sunflower oil were at $1,620 and $515, respectively, traders said.

Soybean oil was cheaper than palm and sunflower oils last month, but a sudden surge in demand for soybean oil sent prices soaring 16% in a month to their highest level in 14 years, traders said.

supply disruption

Nearly two-thirds of India’s edible oil demand comes from imports, mainly from palm oil from Indonesia and Malaysia.

But Indonesia’s decision to restrict palm oil exports has pushed prices of tropical oil to record highs and created a shortage in the edible oil market, a Mumbai dealer and a global trading company said.

“Edible oil importers have been looking for alternatives in the form of soybean oil, but soybean production in South America is shrinking significantly,” the retailer said.

This month, Brazil’s statistics agency Conab cut its 2021/2022 soybean production forecast by around 15 million tons, while Paraguay’s soybean output could be halved.

Argentina, the top exporter of soybean oil, also faces a 5 million-ton drop in soybean production in 2021/22.

In addition, falling water levels in Argentina’s main Paraná river prevented it from being fully loaded with soybeans, reducing the size of the cargo by as much as 30 percent.

On the other hand, another marketer at a trading firm said the U.S. faces a potential soybean oil surplus after the Biden administration proposed a reduction in biofuel blending mandates.

He said India could import as much as 160,000 tonnes of soybean oil from the US in 2021/22, up from 36,000 tonnes a year ago.

Indian traders have also signed an agreement to import 30,000 tonnes of soybean oil from the Black Sea region, but port congestion has delayed shipments, said the Indian director of a global trading company.



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