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Palm Imports by India Falling 30% as Price Highest Since ’12

Palm oil imports by India, the world’s biggest buyer, probably tumbled for a second month as global prices jumped to the highest level since 2012 and refiners awaited domestic rapeseed supplies. Futures declined.

Shipments of the main crude and refined oils fell 30 percent to 550,000 metric tons in February from a year earlier, the median of estimates from five processors and brokers compiled by Bloomberg show. Imports in January fell to the lowest since April, according to the Solvent Extractors’ Association of India, which is set to release data this week.

Reduced demand from India may curb a rally in futures in Kuala Lumpur, which jumped 17 percent in the past year on concern production of cooking oils will drop as dry weather from Southeast Asia to South America cut prospects for crops. India imports more than 50 percent of its cooking oil demand, shipping palm from Indonesia and Malaysia, the top producers, and soybean oil from the U.S., Brazil and Argentina.

“The pace of imports has reduced because of the rising prices,” Sandeep Bajoria, chief executive officer of Mumbai-based broker Sunvin Group, said by phone. “The gap between palm and soft oils has narrowed, so we can see some shift in demand but not a substantial amount,” he said, referring to soybean and sunflower oils.

Crude soybean oil imports probably jumped 60 percent to 100,000 tons in February from 62,585 tons a year earlier, while sunflower oil purchases rose to 100,000 tons from 84,310 tons, the survey shows. Total vegetable oil imports, including for industrial use, dropped 20 percent in February to 780,000 tons.

Price Gap

Palm futures retreated 1.8 percent to 2,821 ringgit ($856) a ton on the Bursa Malaysia Derivatives, the biggest decline at close since Dec. 13. Its discount to soybean oil narrowed to $95.35 a ton from an average $194.42 in the past year, data compiled by Bloomberg show.

Cooking oil stockpiles at ports and due to arrive to India probably totaled 1.35 million tons at the start of March from 1.52 million tons a month earlier, said Bajoria.

“Imports declined ahead of the rapeseed crop harvest this month and local demand was also poor,” Ashok Sethia, executive director at Sethia Oils Ltd., said by phone from Kolkata. “Consumption should rise in the summer months.”

India may harvest 7.23 million tons of rapeseed, the main oilseed grown in the winter season, up from 6.7 million tons last year, the association said, citing estimates by the Central Organization for Oil Industry & Trade, on March 10. Total vegetable oil imports by India are seen at 11.2 million tons in the year started Nov. 1, compared to 10.7 million tons a year earlier, COOIT said.

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