Indian Refiners Cancel Palm Oil Orders Amid Price Surge

Indian refiners have canceled 70,000 tons of crude palm oil orders due to a price surge and negative refining margins. The cancellations, influenced by rising Malaysian prices and cheaper soyoil alternatives, could impact the market dynamics, potentially stabilizing palm oil prices while bolstering soyoil trade.

Indian refiners have withdrawn orders totaling 70,000 metric tons of crude palm oil scheduled for delivery from March to June, due to a spike in benchmark Malaysian prices and unprofitable refining margins in India, according to four trade sources.

The world's largest importer of palm oil saw these cancellations over the past three days, including 40,000 tons on Thursday, following an 11% rise in Malaysian palm oil futures. This development may stabilize the Malaysian palm oil price rally but could boost soyoil prices as refiners pivot to alternative oils.

Trade sources, speaking anonymously as they lacked authorization to comment publicly, noted the impact of rising overseas prices and low refining margins in India. As a result, refiners are opting to sell palm oil back to suppliers rather than importing. The switch to soyoil is further encouraged by its slightly lower prices in the global market.