Palm oil imports by India, the world’s biggest buyer, increased for a second month in June as prices declined amid rising global cooking oil supplies.
Overseas purchases of crude and refined oils advanced 28 percent to 649,772 metric tons last month from a year earlier, the Solvent Extractors’ Association of India said in an e-mailed statement today. That was lower than a median estimate of 680,000 tons in a Bloomberg survey published last week.
Rising Indian demand for the oil used in everything from noodles to biofuel may help stem a 28 percent decline in prices in the past year in Kuala Lumpur and ease stockpiles in Indonesia and Malaysia, the biggest suppliers. Cooking oil demand in India may surge to 23 million tons by 2020 from 17.5 million tons now, and imports will rise significantly to meet demand, according to the Food Ministry.
“Imports have been rising as demand in India is increasing and the new crop will be harvested only in October, which is still far away,” said B.V. Mehta, executive director at the extractors’ association. “Rising refined palm oil imports because of lower prices are also a cause of concern for us.”
Palm for delivery in September slumped as much as 2.9 percent to 2,234 ringgit ($700) a ton on the Malaysia Derivatives Exchange today, heading for the lowest close this year. Prices have fallen 4.4 percent this month after declining 2.2 percent in June as output expanded and demand slowed.
Total vegetable oils imports, including for industrial use, gained 21 percent to 947,591 tons in June, the association said. Crude palm oil imports fell 7.4 percent to 353,542 tons in June from a year earlier, while refined, bleached and deodorized palm olein more than doubled to 296,230 tons, the association said.
India is set to import record amounts of the refined variety, taking advantage of lower export taxes in Indonesia and Malaysia as the producers seek to encourage domestic refining, according to Dorab Mistry, a director at Godrej International Ltd. The share of refined oil will climb to 60 percent to 70 percent of total palm purchases by Oct. 31, he said. That may increase to 80 percent by December if India fails to raise the import duty, he said. Such products were 20 percent of shipments a year earlier, the association said.
Soybean oil imports were 138,849 tons in June, compared with 139,794 tons a year earlier, while sunflower oil imports climbed 16 percent to 101,480 tons, the association said. Stockpiles, including those at the ports and in the pipelines, climbed to 2.06 million tons as of July 1, enough to meet about 45 days of consumption, from 1.98 million tons a month ago, association data showed.
“Once we enter the festival months of August and September, the stockpiles should come down,” Mehta said. Imports may climb to a record of 11 million tons this year from 10.2 million tons a year earlier, he said.
Shipments in the eight months through June rose 12 percent to 7.15 million tons, according to the association. India meets more than half of its demand through imports. It buys palm oil from Indonesia and Malaysia and soybean oil from the U.S., Brazil and Argentina.