How is India coping with Indonesia's curbs on palm oil exports?

Indonesia’s plans to restrict palm oil exports are unlikely to create a shortage in top consuming market India, where stocks have risen to a record high following aggressive imports in the past three months, industry officials said.

That’s a sharp contrast with last year when a sudden change in export policies by Jakarta forced India to increase purchases from Malaysia, which at the time was selling palm oil at record high prices .

Last week, Indonesia said it will suspend some palm oil export permits to secure domestic supply as cooking oil prices rise ahead of upcoming Islamic festival Ramadan.

India’s edible oil imports in the first quarter of the 2022/23 marketing year – which started on Nov. 1 – rose 25% from a year ago to around 4.5 million tonnes, dealers said.

The imports have lifted stocks to a record 3.6 million tonnes as of Feb. 1 compared to 1.83 million tonnes a year ago, they estimated.

“Indonesia’s restrictions are unlikely to create any problems in India. Stock levels are comfortable,” Ajay Jhunjhunwala, president of the Solvent Extractors’ Association of India, told Reuters.

Rapeseed supplies from the new season’s crop, which is expected to be 10% to 15% higher than the last year’s record harvest, will gain momentum from the next month and increase edible oil availability, he added.

Indonesia’s exports restrictions are likely to be lifted after Ramadan month, which ends on April 21, said a Mumbai-based dealer with a global trade house.

“This year a different ball game is there. There is ample sunflower oil supply, which wasn’t flowing freely last year because of the Russia-Ukraine conflict,” the dealer said.

India’s January sunflower oil imports surged to a record 473,000 tonnes, nearly triple average monthly imports as top exporters Russia and Ukraine seek to reduce stockpiles.

Buyers of palm oil will again seek to increase purchases from Malaysia, the world’s second biggest exporter, but not to the same extent as last year, said a Singapore-based dealer.

Malaysian stocks at the end of January rose 3.26% from the previous month to 2.27 million tonnes.

“Indonesian farmers suffered last year because of the export ban. This year, Indonesia will not ban the exports altogether, but will limit only for a few weeks,” the dealer said.