India snaps up steeply discounted palm oil from Colombia, Guatemala

MUMBAI, Aug 21 (Reuters): Indian importers for the first time bought palm oil from Colombia and Guatemala as producers sitting on surplus stocks offered cargoes at steep discounts, four trade sources with direct knowledge of the matter said.

Indonesia and Malaysia dominate global palm oil supplies and are the main suppliers to India, which imported 9 million tons of palm oil in 2023/24. Colombia and Guatemala, the fourth- and sixth-largest producers of palm oil, usually export their surplus stocks to Europe and North America.

Rising production in the two Latin American countries and their ability to divert their supplies could weigh on benchmark Malaysian palm oil futures , industry officials said.

Colombian and Guatemalan cargoes were offered at steep discounts on a free-on-board (FOB) basis to ensure their landed cost at Indian ports remained lower than supplies from Malaysia and Indonesia, said a Mumbai-based dealer at a global trading house, who declined to be named in line with company policy.

Indian buyers prefer quick shipments, and the shipping time from South America is about 45 days, but the discounts were enough to lure them, the dealer said.

The landed cost of South American palm oil at Indian ports was more than $10 per ton lower than supplies from Indonesia and Malaysia, another Mumbai-based dealer said.