Nov. 9 (Bloomberg) -- Cooking oil imports by India, the world’s second-largest user, probably climbed for a third month in October after a slump in palm oil prices spurred traders to stockpile to meet festival demand.
Purchases rose 6 percent to 950,000 metric tons from 894,045 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 23 percent to 750,000 tons, the survey showed. The Solvent Extractors’ Association of India will publish data next week.
Palm oil, which accounts for more than 80 percent of India’s imports, tumbled to a three-year low of 2,230 ringgit on Oct. 3 as slowing economies from China to Europe curbed demand for food and fuel, pushing inventories to an all-time high in Malaysia. Rising Indian purchases may help pare reserves in Malaysia that’s forecast by Godrej International Ltd. Director Dorab Mistry to reach 3 million tons by January.
“October and November are the high-consumption months in India because of festivals,” Atul Chaturvedi, chief executive officer of Adani Wilmar Ltd., said in a phone interview from Ahmedabad. “Palm oil was the cheapest among the oils so there was good demand for it.”
Palm oil for delivery in January fell 0.9 percent to close at 2,316 ringgit ($757) a ton on the Malaysia Derivatives Exchange. Futures have fallen 27 percent this year, heading for a second annual drop.
Vegetable oil purchases are estimated at an all-time high of more than 10 million tons in the year ended Oct. 31 because of rising consumption and a decline in local oilseed crop, said Sandeep Bajoria, chief executive officer of Mumbai-based trader Sunvin Group. Imports were a record 9.24 million tons in 2009-2010, according to data from the extractors’ association.
Shipments in the 11 months through September jumped 18 percent to 9.16 million tons, according to the extractors’ association. India bought 8.7 million tons in 2010-2011.
“The new crop is just coming in, so traders imported more to meet local demand,” Ashok Sethia, executive director of Sethia Oils Ltd., said by phone from Kolkata. “Prices were falling and everyone thought it is the right time to buy.”
Crude soybean-oil imports probably fell to 100,000 tons in October from 186,836 tons a year earlier, while sunflower-oil purchases may have climbed to 70,000 tons from 64,420 tons, the survey showed.
“Imports will now taper off as the new crop arrives,” Bajoria said. Stockpiles at ports are estimated at about 850,000 tons as of Nov. 1, he said. Reserves were 880,000 tons on Oct. 1, the extractors’ data showed.
India buys palm oil from Indonesia and Malaysia, and soybean oil from Brazil and Argentina.
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