MUMBAI: India’s palm oil imports in January dropped more than 12% from a month ago to a three-month low as negative refining margins for crude palm oil (CPO) prompted refiners to switch to rival soyoil, a leading trade body said on Monday.

Lower purchases by the world’s biggest importer of vegetable oils could keep palm oil inventories elevated in top producers Indonesia and Malaysia, and weigh on benchmark futures.

Palm oil imports in January fell about 12.4% from the previous month to 782,983 metric tons, the Mumbai-based Solvent Extractors’ Association of India (SEA) said in a statement.

Imports of soyoil rose 23.7% to 188,859 tons, those of sunflower oil were down about 15.6% at 220,079 tons as the oil became expensive because of higher freight rates following Houthi attacks on Red Sea shipping, the SEA said. T

he lower palm oil and sunflower oil imports pulled down India’s total vegetable oil imports by 8.4% to 1.20 million tons, it said. Negative refining margins in palm oil versus positive margins in soyoil have prompted a switch from palm oil to soyoil in recent weeks, said a New Delhi-based dealer with a global trade house.

“In the coming months, palm oil imports could fall further to make room for additional shipments of soyoil, which is cheaper,” the dealer said.

Crude palm oil (CPO) imports are being offered at about $932 a metric ton, including cost, insurance and freight (CIF), in India for March delivery, while soyoil and sunflower oil are offered around $919 and $925 a ton, respectively, dealers said.

India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.

The rebound in palm oil prices is likely to be capped by abundant supplies of rival soyoil and sunflower oil, “soft” oils that are available at discounts to tropical palm oil for the first time in more than a year, industry officials said last week.