India’s palm oil imports plunged to their lowest level in nine months in February, as higher prices prompted buyers to reduce purchases of the tropical oil in favour of rival sunflower oil, a leading trade body said on Wednesday.

Lower purchases by India, the world’s biggest importer of vegetable oils, could cap a rally in benchmark Malaysian palm oil futures, but will help to reduce sunflower oil inventories in the Black Sea region.

Palm oil imports in February fell about 36% from the previous month to 497,824 metric tons, the lowest since May 2023, the Mumbai-based Solvent Extractors’ Association of India (SEA) said in a statement.

“The availability of palm oil for edible oil requirements has come down as the main two producers Malaysia and Indonesia are diverting it for the production of biodiesel.

This may result in an increase in prices this year,“ the SEA said.

On the flip side, sunflower oil imports in February jumped about 35% to 297,092 tons on lower prices and as shipments originally expected in January arrived in February due to delays caused by Houthi attacks on Red Sea shipping lanes, it said.

However, soyoil imports in February slipped 8% from a month ago to 172,936 tons and were far below the monthly average imports of 306,000 tons in the marketing year ended Oct. 31.

Palm oil hovering around 8-month highs as stronger rivals offset lower exports

That combined with the drop in palm oil imports pulled down India’s total edible oil imports in February to the lowest level in nearly two years at 0.97 million tons, the SEA said.

Vegetable oil stocks in India on March 1 fell 10% from a month ago to 2.38 million tons, their lowest in 18 months, due to lower imports in the last few months, the SEA data showed.

“With refiners rebuilding stocks and margins improving, we could see higher imports in March,” said a New Delhi-based dealer with a global trade house.