Palm oil imports by India, the world’s biggest importer, probably declined for the first time in three months as farmers prepared to collect the largest winter oilseed crop in three years, a Bloomberg survey showed.
Shipments of the main crude and refined oils tumbled 26 percent to 650,000 metric tons in January from 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, fell 17 percent to 960,000 tons, the survey showed. The Solvent Extractors’ Association of India will release the data this week.
Reduced demand may curb a rally in palm oil futures and boost inventories in Indonesia and Malaysia, the world’s largest producers. India increased a tax on refined cooking oils last month to protect oilseed growers and refiners from a surge in imports of processed palm oil. Winter-oilseed output may reach 10.5 million tons, according to the association.
“India had imported excess palm oil before the import duty was raised and now purchases are moderating,” said Ashok Sethia, executive director at Sethia Oils Ltd., and a former president of the association. “Imports may slow further as supplies increase because farmers may be prompted to sell old inventories ahead of a good rapeseed harvest.”
Imports surged to 1.07 million tons in December, the highest since January 2013, before the tax on refined cooking oils was increased to 10 percent from 7.5 percent.
Palm oil for April delivery climbed 1 percent to 2,635 ringgit ($794) a ton on the Bursa Malaysia Derivatives, the highest price at close since Jan. 3. Futures advanced 9.1 percent last year. World exports of palm oil may decline for the first time in 16 years, dropping 2.3 percent to 43.2 million tons in 2013-2014, Oil World, a Hamburg-based researcher, estimates.
“Imports also decreased because of less domestic demand during the winter season,” said Govindlal G. Patel, managing partner at G.G. Patel & Nikhil Research Co. Crude palm oil imports may total as much as 500,000 tons this month, he said.
Cooking oil stockpiles at ports and due to arrive to India probably fell 7.5 percent to about 1.47 million tons at the start of February from 1.59 million tons a month earlier, said Sandeep Bajoria, chief executive officer of Sunvin Group.
Crude soybean oil imports probably gained 55 percent to 160,000 tons in January, while sunflower oil purchases were little changed at 130,000 tons, the survey showed.
India meets more than 50 percent of its cooking oil demand through imports. Purchases may climb 4.2 percent to a record 11.1 million tons this season, including 8.3 million tons of palm, Godrej International Ltd.’s Dorab Mistry said on Nov. 29.