Palm Oil Imports by India Surge to Three-Month High on Demand
Purchases of crude and refined oils advanced 10 percent to 755,871 metric tons last month from 685,877 tons a year earlier, the Solvent Extractors’ Association of India said in an e-mailed statement today. That matched a median estimate of 750,000 tons in a Bloomberg survey published last week and the most since 785,915 tons in February, according to the association. Imports of refined, bleached and deodorized palm olein more than doubled to 373,837 tons in May, the highest since 1994, it said.
Rising Indian imports may help futures in Kuala Lumpur extend gains for a second month. Futures jumped to a two-month high last week on speculation that a pick up in demand ahead of the Muslim fasting month of Ramadan in July may help trim stockpiles in Malaysia, the second-largest producer.
“Local supply is not enough to meet the rising demand,” B.V. Mehta, executive director of the association, said by phone from Mumbai. “Demand is rising by 5 percent every year and we would need about 800,000 tons of additional imports to meet this increase.”
Total vegetable oils imports, including for industrial use, gained 2.3 percent to 917,964 tons in May, the association said. Shipments in the seven months through May rose 10 percent to 6.2 million tons, it said. Crude palm oil imports fell 27 percent to 382,034 tons in May from a year earlier, the association said.
“It makes no sense to import crude palm oil now as the duty difference between crude and refined has come down to $10 from $70 earlier,” Mehta said. India raised the import duty on crude oils to 2.5 percent in January, and left the tax on refined oils unchanged at 7.5 percent.
Palm for delivery in August was little changed at 2,452 ringgit ($780) a ton on the Malaysia Derivatives Exchange at 2:42 p.m. in Kuala Lumpur. Futures closed at 2,457 ringgit on June 7, the highest price for the most-active contract since March 25. Prices have climbed 2.3 percent this month after gaining 4.9 percent in May.
India, the world’s biggest cooking oil consumer after China, meets more than half its demand through imports. It buys palm oil from Indonesia and Malaysia and soybean oil from the U.S., Brazil and Argentina.
Soybean oil imports fell 16 percent to 52,392 tons, while sunflower oil imports declined 46 percent to 67,805 tons, it said. Stockpiles, including those at the ports and in the pipelines, climbed to 1.98 million tons as of June 1 from 1.82 million tons a month ago, the association data showed.
“The decline in the rupee will have a marginal impact on imports as the fall in prices over the last few months have been a silver lining and will provide some cushion to consumers,” Mehta said.
To contact the reporter on this story: Swansy Afonso in Mumbai at firstname.lastname@example.org
To contact the editor responsible for this story: James Poole at email@example.com