Cooking-Oil Imports by India Set to Drop on Stockpiles
(Corrects data timing in second paragraph.)
Shipments slid 4.2 percent to 875,000 metric tons last month from 913,179 tons a year earlier, according to the median estimate in a Bloomberg survey of five processors and brokers. Imports of crude and refined palm oil declined to 600,000 tons from 619,322 tons, the survey showed. The Solvent Extractors’ Association of India will publish shipment data this week.
Reduced imports by India, the world’s biggest palm oil buyer, may swell inventories in Malaysia that climbed to a five- month high in July. Futures have slumped 21 percent from a 13- month high in April on speculation that demand may wane due to a slowdown in China and the European debt crisis.
“The market is already over supplied,” said Nagaraj Meda, chairman of Hyderabad-based Transgraph Consulting Pvt. “In the festival season, we might not see any considerable surge in demand as food inflation is very high and Indian rural consumption is likely to take a beating due to crop failure in many states.”
Palm oil for September delivery rose 0.6 percent to 2,882 ringgit ($924) a ton on the Malaysia Derivatives Exchange on Aug. 10. The most-active contract rose to a 13-month high of 3,628 ringgit on April 10.
“The time of stocking up for festivals is gone as palm oil is available round the year and international prices are also not too high,” Atul Chaturvedi, chief executive officer at Adani Wilmar Ltd., said by phone.
Imports between August and October may be around 850,000 tons to 900,000 tons a month, said Sandeep Bajoria, chief executive officer of the Sunvin Group. The peak demand season in India is between August and November.
A surge in imports this year lifted cooking-oil inventories including those at ports to a record 1.7 million tons in May, according to the extractors’ association. Stockpiles may be about 1.6 million tons as of Aug. 1, Bajoria said.
Shipments in the eight months through June jumped 25 percent to 6.4 million tons, according to the extractors’ association. India bought 8.7 million tons in 2010-2011. Vegetable-oil purchases in 2012-2013 may exceed the 9.5 million tons estimated for this year as the worst monsoon since 2009 curb oilseed planting, B.V. Mehta, executive director at the extractors’ association, said on July 31.
The area under oilseeds including soybeans and peanuts fell to 15.2 million hectares as of Aug. 9 from 15.8 million hectares a year earlier, according to the farm ministry.
Crude soybean-oil imports probably fell to 125,000 tons in July from 163,650 tons a year earlier, while sunflower-oil purchases may be unchanged at 100,000 tons, the survey showed.
Palm oil comprises almost 80 percent of India’s cooking-oil imports. The nation buys palm from Indonesia and Malaysia, and soybean oil from Brazil and Argentina.
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