Palm oil imports by India, the world’s largest buyer, increased in April to the highest level this year after prices tumbled to a seven-month low.
Inbound shipments of crude and refined palm oil rose 7.5 percent to 718,091 metric tons from March, the Solvent Extractors’ Association of India said in an e-mailed statement. That compares with the median estimate of 700,000 tons in a Bloomberg survey. Total vegetable oil imports, including for industrial use, rose 4.4 percent to 1.1 million tons, it said.
Prices in Kuala Lumpur fell in April to the lowest since September as record soybean supplies and lower crude oil costs weakened demand for the commodity used in everything from noodles to biofuel. Palm may slump to a six-year low in the second half as supplies expand and reserves accumulate, according to Dorab Mistry, director at Godrej International Ltd.
“Imports will continue to grow in the coming months as the domestic winter oilseed crop was lower and as palm producing countries push their higher output into India,” Chowda Reddy, associate vice president at Inditrade Derivatives & Commodities Ltd., said by phone from Hyderabad on Thursday.
Futures slumped to 2,070 ringgit ($572) a ton on the Bursa Malaysia Derivatives on April 29, the lowest since Sept. 22, and ended at 2,206 ringgit on Thursday. A weakening rupee may increase costs for Indian buyers, Reddy said. The rupee weakened 1.5 percent in May, making it Asia’s worst performer.
Crude soybean oil imports fell 2.3 percent to 186,849 tons in April from a month earlier while sunflower oil shipments declined 5.7 percent to 152,196 tons, the association said. India also imported 33,546 tons of canola oil, it said.
Stockpiles at ports and in the pipeline surged to a record 2.1 million tons as of May 1, more than the monthly requirement of 1.6 million tons, the association said. Total vegetable oil shipments in the six months ended April climbed 25 percent to 6.46 million tons from a year earlier, the association said.
Domestic supplies of oils will decline 9 percent to 7.6 million tons this year because of a decline in oilseed production, according to the Central Organisation for Oil Industry & Trade. India meets more than 50 percent of its demand through palm oil imports from Indonesia and Malaysia and soybean oil purchases from the U.S., Brazil and Argentina.