India Diversifies Palm Oil Imports Beyond Southeast Asia

For the first time, Indian importers have purchased palm oil cargoes from Colombia and Guatemala, marking a major shift in sourcing strategy. Traditionally, India — the world’s largest palm oil buyer — has relied heavily on Indonesia and Malaysia, which dominate global exports. However, surplus stocks in Latin America prompted producers to offer shipments at steep discounts, making them attractive to Indian buyers.

Discounted Palm Oil from Colombia and Guatemala

Colombia, the fourth-largest palm oil producer, and Guatemala, ranked sixth, usually export to Europe and North America. But with rising production and surplus volumes, they are now entering the Asian market. According to trade sources, Colombian and Guatemalan palm oil cargoes were offered on a free-on-board (FOB) basis at lower prices, ensuring that landed costs at Indian ports were cheaper than Indonesian and Malaysian supplies.

Price Advantage Despite Higher Freight Costs

Shipping palm oil from South America costs nearly $90 per ton, almost double the $45 per ton freight from Southeast Asia. Still, the landed cost of Latin American palm oil in India was $10 per ton cheaper, one Mumbai-based dealer confirmed.

Currently, crude palm oil (CPO) is priced at around $1,165 per ton CIF for October delivery in India. The first shipments from Colombia and Guatemala are expected to load in September and arrive at Kandla port by October.

Impact on Global Palm Oil Market

Industry experts suggest this first-time purchase may pave the way for more Latin American shipments to India in the coming months. Latin America produces around five million tons of palm oil annually, with nearly 50% exported globally. If discounts continue, Indian buyers could increasingly source from the region, pressuring Malaysian benchmark palm oil futures.

Strong Demand Ahead of India’s Festival Season

India imported nearly nine million tons of palm oil in 2023/24, and demand is expected to remain strong in 2025. With the upcoming festival season beginning in September, edible oil consumption in sweets and fried foods is forecast to rise significantly. Although demand typically softens during winter, experts expect robust short-term imports as refiners secure supplies.

Key Takeaways

• India buys palm oil from Colombia and Guatemala for the first time
• Latin American supplies offered at discounts vs. Southeast Asia
• Despite higher freight, landed costs were $10/ton cheaper
• CPO priced at $1,165/ton CIF India for October delivery
• First shipments to arrive at Kandla port in October 2025
• India’s palm oil demand strong during festival season
• Global trade diversification may pressure Malaysian futures

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