India bought a record amount of edible oil in August

India's edible oil imports rose 5% to a record 1.85 million tons in August as businesses purchased more than 1 million tons of palm oil for the second straight month to stockpile for upcoming festivals, four dealers told Reuters.

Increased purchases by the world's largest vegetable oil importer could help lower palm oil inventories in Indonesia and Malaysia and support futures for base products. The purchase helped strengthen soybean oil futures and could cut inventories in sunflower oil-producing Black Sea countries.

India's average monthly imports of edible oil in the 2021/22 marketing year were 1.17 million tonnes, the Producers' Association of India (SEA) said. In July, India imported 1.76 million tons, which was also a record high.

Palm oil imports increased from 1.09 million tons in July to 1.12 million tons in August, the highest in nine months, according to average dealer estimates.

The SEA is likely to release its vegetable oil import data for August by mid-September.

"Flowers have been actively procuring for the upcoming festival season," said Rajesh Patel, managing partner of GGN Research, an edible oil trader and broker.

"Retail demand has been moderate, but the industry expects it to pick up in the coming months."

Sunflower oil imports jumped 11.5% mom to 365,000 tons, the highest in seven months, while soybean oil imports rose 3.7% to 355,000 tons, dealers estimate.

As the discount on palm oil over soybean and sunflower oil continues to increase, processors are increasing their purchases in anticipation of demand during upcoming festivals, said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.

India purchases palm oil mainly from Indonesia, Malaysia and Thailand, while importing soybean and sunflower oil from Argentina, Brazil, Russia and Ukraine.

Imports surged in August as several ships originally scheduled to unload in July at Kandla port ended up unloading in August due to port congestion, a New Delhi-based global trading house dealer said.

Concerns about local production of soybeans and peanuts due to dry weather are also prompting processors to import more edible oils, the dealer added.

August in India was the driest in more than a century, with 36% less rain than usual in the month.