India Surpasses China as World's Top Soybean Oil Importer
India has surpassed China as the top importer of soybean oil in the world, according to USDA.
Over the last five years, India's soybean oil imports quadrupled to more than 4 million metric tons in 2016. This is partly because of a world glut that pushed the prices down, and the increasing palm oil prices are making soy oil more competitive, the Wall Street Journal noted.
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India sprinted past China in 2014 as the biggest importer of soy oil as China expanded its crushing industry and started shifting its focus on raw soybean imports for processing into meal and oil, the AG Web reported citing a report by USDA.
India's soybean oil imports is expected to increase over the next decade to as much as 40 percent, according to an estimate by the U.S. Department of Agriculture last May.
Meanwhile, Indian consumers have also switched to soy oil, thanks to the steep 35 percent drop in price since 2012.
"Demand from India will certainly play a role in absorbing excess soy-oil supplies," Vamsi Krishna Kona, a trade at Inditrade Derivatives & Commodities, said.
However, India's soaking up some glut would not be enough to help increase global prices. "Even though India is importing in large quantities, it will not be sufficient to make a strong movement in prices."
The global soybean oil market has been thriving for two years, as bumper harvests from top producers like Argentina and the U.S. coincided with China's decline in imports. Global soybean production worldwide will increase about 5.6 percent to 330.43 million tons, compared with last year's 312.97 million tons, according to USDA estimates.