India buys heavily discounted palm oil from Colombia, Guatemala

By Admin

22 Aug, 2025

New Delhi: In a first, Indian importers have turned to Latin America for palm oil, purchasing cargoes from Colombia and Guatemala at steeply discounted rates. The move comes as producers in the two countries, sitting on surplus stocks, looked for new markets beyond their traditional buyers in Europe and North America.

Shift Beyond Traditional Suppliers

Indonesia and Malaysia dominate the global palm oil trade and remain India’s primary suppliers. In the 2023/24 period, India imported nearly 9 million tons of palm oil, most of it from these Southeast Asian giants. However, rising output in Colombia the world’s fourth-largest producer and Guatemala the sixth-largest has allowed them to divert some of their supplies to India for the first time.

Discounts Drive Indian Interest

Trade sources revealed that Colombian and Guatemalan cargoes were offered at steep discounts on a free-on-board (FOB) basis, making their landed cost at Indian ports over $10 per ton cheaper than supplies from Malaysia and Indonesia. Despite longer shipping times of around 45 days from South America, the discounts were attractive enough to lure Indian buyers.

A Mumbai-based dealer noted that Indian buyers typically prefer quick shipments, but the pricing difference tipped the balance in favor of Latin American cargoes. Another dealer confirmed that crude palm oil (CPO) is currently being offered at about $1,165 a ton (CIF) for October delivery in India.

Freight Costs vs. Final Savings

Freight rates are higher for palm oil shipped from the Americas around $90 per ton compared with $45 from Southeast Asia, according to Sandeep Bajoria, chief executive of Sunvin Group. Still, the overall cost remained competitive, thanks to the steep discounts. Vessels are scheduled to load at South American ports in September and will arrive at India’s Kandla port in October, dealers said.

Impact on Global Markets

Industry officials caution that the entry of Colombian and Guatemalan palm oil into India could weigh on benchmark Malaysian palm oil futures, given the scale of India’s import demand. With Latin America exporting half of its 5 million tons of palm oil annually, these first shipments could pave the way for deeper trade ties.

Aashish Acharya, vice president at Patanjali Foods Ltd, one of India’s leading edible oil importers, said the development signals fresh supply options for India. “This opens the door to more supplies from the region,” he noted.

Demand Rising Ahead of Festival Season

India’s palm oil demand typically surges during the festival season starting in September, when edible oils are widely used to make sweets and fried foods. Acharya added that demand is expected to remain strong in the coming months, although it usually dips again during the winter.

Outlook

India’s pivot to Latin American suppliers marks a notable shift in its edible oil sourcing strategy. While Southeast Asia remains dominant, the arrival of discounted cargoes from Colombia and Guatemala shows that Indian buyers are increasingly open to diversifying imports to secure better deals. This move not only helps ease costs for Indian consumers but could also reshape trade flows in the global palm oil market.