Cooking oil imports by India, the world’s largest palm oil buyer, jumped last month after a decline in prices of the tropical commodity and domestic oilseed supplies spurred demand, a processors’ group said.
Shipments surged 35 percent to 901,092 metric tons in December from 669,912 tons a year earlier, the Solvent Extractors’ Association of India said in an e-mailed statement today. That matched a median estimate of 900,000 tons in a Bloomberg survey of five processors and brokers last week.
Rising Indian purchases may help trim record stockpiles in Malaysia, the world’s second-largest producer, and curb a decline in prices, which fell 23 percent in 2012. Malaysia will allow shipments of the crude oil at zero duty for another month in February as it seeks to reduce inventory, Plantation Industries and Commodities Minister Bernard Dompok said.
“Heavy discount of palm products of $300 to $350 per ton over soft oils, and lower domestic production of vegetable oils due to slowdown in crushing pushed up the import of palm products even during the winter season,” B.V. Mehta, executive director at the trade group, said in the statement.
Palm oil for delivery in March was little changed at 2,367 ringgit ($784) a ton on the Malaysia Derivatives Exchange at 1:25 p.m. in Mumbai, erasing gains of as much as 1.4 percent earlier. Futures slumped to a three-year low of 2,217 ringgit on Dec. 13. Soybean oil’s premium was at $313.572 a ton today, compared with an average of $208.33 a ton in the past year, according to data compiled by Bloomberg.
Crude palm oil imports rose 44 percent to 628,618 tons in December, while refined palm oil purchases climbed 28 percent to 137,475 tons, the extractors’ association said. Soybean oil imports nearly tripled to 21,960 tons from 7,387 tons a year ago, while sunflower oil purchases dropped 27 percent to 69,000 tons, it said.
Inventories, including those at ports and in the pipeline, were 1.46 million tons as of Jan. 1, data from the association showed. India imported a record 10.2 million tons of vegetable oils in 2011-2012, according to the extractors’ association.
India’s palm oil imports may rise by 750,000 tons this year, Govindlal G. Patel, managing partner at GG Patel & Nikhil Research Co., said in Kuala Lumpur today. Imports were 7.57 million tons in 2011-2012, according to the trade body data.
Palm oil represents almost 80 percent of India’s cooking-oil imports. It buys palm from Indonesia and Malaysia, and soybean oil from Brazil and Argentina.