Palm oil imports by India, the world’s biggest buyer, declined in May after refiners bought more soybean and sunflower oils amid record global supplies.
Shipments of crude and refined palm oils slid 14 percent to 647,756 metric tons last month from a year earlier, the Solvent Extractors’ Association of India said in an e-mailed statement today. That’s lower than the median estimate of 668,000 tons in a Bloomberg survey. Crude soybean oil imports more than tripled to 174,209 tons, while sunflower oil purchases more than doubled to 178,753 tons, the association said.
Dwindling Indian demand for palm oil may expand stockpiles in Indonesia and Malaysia, the biggest growers, and pressure prices in Kuala Lumpur, which dropped 8.4 percent this year. Soybean oil’s premium over palm, the world’s most-used cooking oil, narrowed to average $91 a ton this year from $244 a ton in 2013, according to data compiled by Bloomberg.
“If traders are getting sunflower and soybean oil at similar rates to palm oil, why would anyone buy palm? It is easier to process soybean oil,” B.V. Mehta, executive director of the association, said by phone from Mumbai. “Ukraine’s sunflower crop will arrive in August and supplies will increase, so we can see more of these oils coming in to India in the next few months.”
Farmers in the U.S. will harvest 3.635 billion bushels of soybeans, the most ever, the Department of Agriculture estimates. World output of seven major oilseeds will be a record 487.5 million tons in the year to Sept. 30, according to researcher Oil World in Hamburg.
Futures fell as much as 0.2 percent to 2,422 ringgit ($751) a ton on Bursa Malaysia Derivatives after the data was released before rebounding to 2,437 ringgit at 4:57 p.m. local time.
Cooking oil stockpiles at ports and scheduled shipments advanced for the first time since January to 1.42 million tons on June 1 from 1.17 million tons a month earlier, data showed. Total imports, including for industrial use, increased 13 percent in May to 1.03 million tons, the association said.
India’s total cooking oil imports were 6.2 million tons in the seven months ended May, unchanged from a year earlier, data showed. The country imports more than 50 percent of its demand, shipping palm oil from Indonesia and Malaysia, and soybean oil from the U.S., Brazil and Argentina.