Indian traders have contracted to import a record 100,000 tonnes of soyoil from the U.S. because of limited supplies from drought-hit South America, at a time when prices of rival palm oil are scaling record highs, three dealers told Reuters.
The higher purchases from the United States are expected to support U.S. soy oil prices, which have climbed nearly 20% this year to close to their highest in a decade, fuelling worries about food inflation.
The world's biggest edible oil importer traditionally buys soyoil from Argentina and Brazil, but lower bean output in these two leading exporters of the commodity forced New Delhi to turn to the United States, they said.
"Indian buyers have bought U.S soyoil vessels. Prices were attractive and supplies were not enough in South America," said the India head of a global trading firm, who sought anonymity because of the company's policy.
"Buying of another two vessels in the short term is possible."
India usually gets two-thirds of its soyoil needs from Argentina, and the rest from Brazil. But last season's reduced soybean output has tightened soyoil reserves in Argentina, forcing Indian buyers to shop around for alternatives, such as sunoil from the Black Sea region.
"Sunflower oil is cheaper than palm and soyoil, but some buyers are sceptical about deliveries because of geopolitical tension (in Russia)," said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and consultancy firm.
"They are going with soyoil."
Crude palm oil (CPO) is being offered at about $1,575 a tonne, including cost, insurance and freight (CIF), in India for March shipments, compared with $1,620 for crude soybean oil and $1,515 for crude sunflower oil, traders said.
Soyoil was cheaper than palm and sunflower oil last month, but the sudden jump in soyoil demand has lifted prices by 16% in a month to the highest in 14 years, traders said.
