Demand for vegetable oil in India is poised to fall for the first time in decades as restaurants have pulled down their shutters to comply with a government order that imposed a 21-day nationwide lockdown to stem the spread of the coronavirus.
Edible oil consumption in India, the world's biggest importer of the cooking medium, trebled over the past two decades as the population grew, incomes rose, and restaurants sprang up to cater to a crowd that started eating out more often.
Most trade and industry officials now agree that India's vegetable oil demand - predominantly palm oil and soyoil -- will fall below previous year's 23 million tonnes.
The country's consumption would drop by at least a quarter during the lockdown that began last Tuesday, some dealers said.
"Our initial estimates suggest that edible oil demand will fall by about 475,000 tonnes during the 21-day lockdown," said Sandeep Bajoria, chief executive of the Sunvin Group, a leading vegetable oil importer.
Indians, known for their penchant for calorie-laden curry and deep-fried food, consume about 1.9 million tonnes of edible oil a month, with restaurants mainly using palm oil, which accounts for two-thirds of the country's vegetable oil imports.
Lower demand in India, which imports nearly two-thirds of its vegetable oil requirements, will weigh on benchmark palm oil prices in Malaysia, where the contract rose on Monday.
Bajoria said palm oil producers such as Malaysia and Indonesia would tweak their output in line with India's demand.
Govindbhai Patel, chief of trading firm G.G. Patel & Nikhil Research Co, said before the lockdown was imposed, he had estimated India's edible oil demand to touch 23.6 million tonnes in the current 2019/20 year ending October 31, up 2.61 per cent from the previous year.
Now, edible oil consumption would be significantly lower in March and April, said Patel.
Lower demand would drag down imports by at least half a million tonnes this year, said BV Mehta, chief of industry body the Solvent Extractors' Association, against 14.9 million tonnes imported in 2018/19.
Facing disruptions in distribution networks, edible oil refiners are struggling to sell their finished goods, a global trader said, requesting anonymity as he is not authorised to speak to media.
India buys palm oil from Indonesia and Malaysia and soft oils, such as soyoil, from Argentina and Brazil, to make up for a shortfall in its oilseeds' output.