Palm oil imports by India, the world’s biggest buyer, probably climbed for a second month after farmers withheld soybean supplies because of a decline in prices, a Bloomberg survey showed.
Shipments of the main crude and refined oils increased 4.4 percent to 800,000 metric tons in December from 766,093 tons a year earlier, according to the median of estimates from five processors and brokers compiled by Bloomberg. Total vegetable oil imports, including those for industrial use, advanced 11 percent to 1 million tons, the survey showed. The Solvent Extractors’ Association of India releases the data next week.
India may import a record amount of cooking oils for a third year as increasing incomes and an expanding population boost demand for everything from cookies to noodles and detergents. Higher purchases may reduce palm oil stockpiles in Indonesia and Malaysia, the world’s biggest producers, and increase prices in Kuala Lumpur, which posted the first annual advance in three years in 2013.
“The domestic soybean crop was lower than expectations and farmers are holding back the harvest as they are not happy with the prices,” said Pradip Desai, managing director of Palmtrade Services Pvt. Ltd. in Mumbai. “Imports will decline in January and February as demand has slowed.”
The soybean harvest may reach 12.2 million tons in 2013-2014, less than the 12.98 million tons estimated earlier after excess rains damaged the nation’s biggest oilseed crop, according to the Soybean Processors Association of India. Futures fell 1.8 percent in Mumbai in December for a second monthly decline.
Palm oil for March delivery fell 0.2 percent to 2,541 ringgit ($776) a ton on the Bursa Malaysia Derivatives today, the lowest price at close for the most active contract since Nov. 11. Futures advanced 9.1 percent last year.
Refiners and traders in India boosted imports in December on speculation Indonesia may raise export taxes, said Govindlal G. Patel, managing partner at G.G. Patel & Nikhil Research Co. Indonesia kept the tax unchanged at 12 percent this month, after increasing it in December from 9 percent in November.
Cooking oil stockpiles at ports and in the pipeline to India may be about 1.3 million tons as of Jan. 1, according to Sandeep Bajoria, chief executive officer of Sunvin Group. Inventories gained by 5 percent to 1.47 million tons at the start of December, association data showed.
Crude soybean oil imports probably jumped to 60,000 tons in December from 21,960 tons a year earlier, while sunflower oil purchases climbed to 100,000 tons from 69,000 tons, the survey showed. India meets more than 50 percent of its annual cooking oil demand through imports.
Vegetable oil purchases surged 4.8 percent to a record 10.7 million tons in 2012-2013, association data showed. Imports may climb 4.2 percent to 11.1 million tons this season, including 8.3 million tons of palm oil, Godrej International Ltd.’s Dorab Mistry said on Nov. 29.