Global palm oil demand drivers will be India and China again since these nations are expected to maintain their highest presence as the world’s leading palm oil importers. The International Monetary Fund (IMF) in its World Economic Outlook had estimated the global economic growth at 5.9% in 2021.
The agency expects the global economic outlook to continue in 2022, led by India and China and the leading palm oil importers would still be China and India – these two nations holding the largest population in the world.
China is the world's second-largest buyer of palm oil after India and imports about 6 - 7 million tonnes of this tropical commodity from Indonesia and Malaysia, every year. India's palm oil purchases rose 15% in the marketing year 2020-21 (November-October).
The SEA (Solvent Extractors Association) data showed that in 2020-21 palm oil's share of imports grew to 63% as soft oil imports fell to a five-year low of 4.81 million mt from 5.96 million mt in 2019-20. Imports grew in 2020-21 mainly because of the reopening of the HoReCa [Hotels, Restaurants, and Catering] sector coupled with a massive reduction in import duties and allowing import of RBD palm olein.
According to Refinitiv Agricultural Research, global palm oil demand for 2021/22 is forecast at 50.6 million tonnes, up 6.5% compared to the prior season.
India palm oil imports are estimated at 8.6 million tonnes in 2021/22, considering the reopening of business activities, multiple import tax cuts, and lifting of import restrictions on RBD palmolein. Similarly, China's palm oil imports are expected to rise to 7.2 million tonnes in 2021/22, driven by the economic recovery. As per reports, a lot of palm oil shipments to the Middle East are lined up, ahead of the Lunar New Year and Winter Olympics in February 2022.
Industry experts perceive a tight inventory situation as well as higher price levels during the first half of 2022.
