India, the world’s largest cooking oil consumer after China, probably imported a record quantity last month as traders and refiners rushed to buy before a tax increase, boosting domestic stockpiles to an all-time high. Palm oil futures rose in Malaysia.
Purchases surged 74 percent to 1.15 million metric tons in January from 659,979 tons a year earlier, according to the median of estimates from five processors and brokers compiled by Bloomberg. Imports of crude and refined palm oils jumped 76 percent to 900,000 tons, the survey showed. The Solvent Extractors’ Association of India will publish data next week.
India, the world’s biggest palm oil buyer, imposed a 2.5 percent tax on overseas purchases of unprocessed cooking oils in January and almost doubled the taxable value of imports to shield domestic oilseed growers from cheap overseas supplies. The taxes were announced after the extractors’ association demanded steps to curb supplies for months and Malaysia set a zero tax on crude palm oil exports from the start of the year.
“Imports were higher in anticipation of an increase in import tax,” said Sandeep Bajoria, chief executive officer of Mumbai-based broker Sunvin Group. “Malaysia is also aggressively marketing its palm oil by lowering export taxes.”
Malaysia, the second-largest palm oil producer, set the export tariff at zero in January and extended it to February to clear stockpiles, which were at a record 2.63 million tons in December. Zero-duty exports may be allowed in March if prices remain below the threshold of 2,250 ringgit ($727) a ton, said Plantation Industries & Commodities Minister Bernard Dompok.
Futures have rallied 15 percent from a three-year low of 2,217 ringgit on Dec. 13 on speculation the Malaysian tax cut will spur demand among importers and trim record inventories. The contract for delivery in April climbed as much as 0.8 percent to 2,567 ringgit a ton on the Malaysia Derivatives Exchange and closed at 2,551 ringgit.
Imports of all cooking oils may surge to a record 11.5 million tons in the year that started Nov. 1, Vijay Data, president of the extractors’ association, said on Feb. 4. Purchases jumped to an all-time high of 10.2 million tons last year, according to data from the association.
Indian inventories, including those at ports and in the pipeline, may rise to a record of 1.7 million tons as of Feb. 1, a level last seen in May 2012, Bajoria said. India buys palm oil from Indonesia and Malaysia, and soybean oil from Brazil and Argentina.
“Imports will continue to be on the higher end in February as local supplies are not adequate due to lower crushing of soybeans,” said Govindlal G. Patel, managing partner at GG Patel & Nikhil Research Co. “February vegetable oil imports may be 900,000 tons.”
Crude soybean oil imports probably jumped to 110,000 tons in January from 47,150 tons a year earlier, while sunflower oil purchases may have risen to 120,000 tons from 89,500 tons, the survey showed.
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