Purchases of vegetable oils, including for industrial use, slumped 29 percent to 654,827 metric tons in April from 925,334 tons a year earlier, the Solvent Extractors’ Association of India said in an e-mailed statement today. That’s lower than a median estimate of 700,000 tons in a Bloomberg survey of five processors and brokers.
A drop in imports by India, the biggest palm oil buyer, may extend losses in futures traded in Kuala Lumpur. Prices are down 27 percent in the past year as production in Indonesia and Malaysia, the world’s biggest suppliers, outpaced demand. India’s cooking oil stockpiles were at 1.8 million tons on May 1, compared with 1.56 million tons a year earlier and a record 2.12 million tons in March, association data showed.
“We had overstocked on supplies in the last few months,” B.V. Mehta, executive director of the association, said by phone. An increase in the import duty narrowed the price difference between crude and refined palm oil to $10 a ton, boosting purchases of refined oil, he said.
In January, India almost doubled the taxable prices of crude cooking oil imports and imposed a duty of 2.5 percent to shield domestic oilseed growers from cheap overseas supplies. Refined edible oil imports are taxed at 7.5 percent.
Crude palm oil imports dropped 44 percent from a year earlier to 233,987 tons, while refined palm oil purchases more than doubled to 253,489 tons, the association said. Soybean oil imports slumped to 50,999 tons from 216,509 tons, while sunflower oil fell 32 percent to 88,368 tons, it said. India buys palm from Indonesia and Malaysia, and soybean oil from Brazil and Argentina.
“Local consumption always slows in the summer months,” said Mehta. “We can see a pickup in demand in August” when the festival season begins in the country, he said.
Vegetable oil purchases in the six months to April rose 12 percent to 5.3 million tons, association data showed.
Palm for delivery in July fell 0.7 percent to 2,293 ringgit ($767) a ton on the Malaysia Derivatives Exchange at 5:05 p.m. in Kuala Lumpur. Futures dropped 3.9 percent in April, the third straight month of losses.
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