Indian Palm Oil Cancellations Shake Global Market

Indian refiners canceled 100,000 tons of crude palm oil shipments due to a surge in prices and negative margins. This move might affect Malaysian palm oil prices and support soyoil demand. The switch to cheaper soyoil imports reflects the challenges faced by refiners amid market fluctuations.

Indian refiners have halted orders for 100,000 metric tons of crude palm oil, set for delivery from March to June, due to a surge in Malaysian prices and negative refining margins in India, according to industry sources.

The cancellations, involving 30,000 tons on Friday alone, come after Malaysian palm oil futures jumped over 11% in four weeks, potentially stabilizing or pulling back the price rally. However, a shift towards soyoil could keep those prices firm, as some refiners opt for this alternative.

Refiners, facing higher overseas costs, are opting to sell palm oil back to suppliers rather than import it, with a significant increase in soyoil imports evident from February to March, as noted by industry experts, potentially driven by India's anticipated increase in palm oil import duties.