Cooking oil imports by India, the world’s second-largest user, probably declined for the first time in four months after record purchases in October boosted inventories and domestic supplies from the new crop increased.
Purchases fell 9.4 percent to 775,000 metric tons in November from 855,363 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 fell 8.5 percent to 660,000 tons, the survey showed. The Solvent Extractors’ Association of India will publish data this week.
Reduced imports by India, the world’s biggest palm oil buyer, may swell inventories in Malaysia that are at a record, and extend a 28 percent slump in prices this year. Stockpiles in Malaysia jumped to 2.56 million tons last month, the nation’s palm oil board said yesterday. The commodity will probably tumble into a bear market next year as monthly output in Malaysia and Indonesia surges to records, according to Dorab Mistry, director at Godrej International Ltd.
“We started this season with high stockpiles as imports in October were at a record,” Pradip Desai, managing director of Palmtrade Services Pvt., a Mumbai-based broker, said. “Prices were also falling, so importers are waiting for them to stabilize before buying new supplies.”
Palm oil for delivery in February declined 1 percent to close at 2,291 ringgit ($749) a ton on the Malaysia Derivatives Exchange today, the biggest fall in a week. Futures lost 5.1 percent last month.
Cooking oil imports surged 17 percent to an all-time high of 10.2 million tons in the year ended Oct. 31, according to data from the extractors’ association. Purchases in October were a record 1.04 million tons, it said.
Inventories, including those at ports and in the pipeline, were 1.6 million tons as of Nov. 1, near a record 1.7 million tons in May, data from the association showed. “These stockpiles are quite high as demand is weak,” Desai said.
Crude soybean-oil imports probably jumped to 30,000 tons in November from 8,000 tons a year earlier, while sunflower-oil purchases may have declined to 60,000 tons from 78,633 tons, the survey showed.
“A good soybean crop and better domestic availability of oils aided the decline in imports,” Atul Chaturvedi, chief executive officer of Adani Wilmar Ltd., said. Harvesting of the new soybean crop is under way, boosting supplies.
Soybean crop is estimated at a record 11.5 million tons this year, Rajesh Agrawal, spokesman for the Soybean Processors’ Association, said on Oct. 23. India buys palm oil from Indonesia and Malaysia, and soybean oil from Brazil and Argentina.