Cooking Oil Imports by India Seen Surging on Palm Oil PlungeSwansy Afonso
Cooking oil imports by India, the world’s second-largest user, probably jumped in December after palm oil prices slumped to a three-year low and farmers curbed domestic oilseed sales.
Purchases rose 34 percent to 900,000 metric tons in December from 669,912 tons a year earlier, according to the median of estimates from five processors and brokers compiled by Bloomberg. Imports of crude and refined palm oils probably gained 38 percent to 750,000 tons from 543,830 tons, the survey showed. The Solvent Extractors’ Association of India will publish data next week.
Palm oil dropped 23 percent in Kuala Lumpur last year, the worst slump since the financial crisis in 2008, as slowdowns in Europe and China curbed demand, boosting stockpiles in Indonesia and Malaysia, the biggest producers. Increased imports by India, the biggest palm oil buyer, may help pare inventories and stem the slide in futures. Reserves in Malaysia rose 2.4 percent to a record 2.63 million tons in December from a month earlier, the Palm Oil Board said today.
“Prices have been cheaper than last year and there is good demand,” said Govindlal G. Patel, managing partner at GG Patel & Nikhil Research Co. “The local soybean harvesting is going on, but the oil content in the seed is lower and availability of oil is not comfortable.”
Palm oil for delivery in March fell as much as 2.3 percent to 2,356 ringgit ($777) a ton on the Malaysia Derivatives Exchange and was at 2,377 ringgit at 4:06 p.m. in Kuala Lumpur. Futures have rebounded 7.2 percent after slumping to a three-year low of 2,217 ringgit on Dec. 13.
India may buy a record quantity of palm oil in January as Malaysian exporters are boosting crude palm oil sales to benefit from zero tax on shipments, the extractors’ group said Dec. 20. Malaysia allowed duty-free exports after fixing the average price for calculating the tax at 2,147.81 ringgit a ton for this month, below a minimum threshold of 2,250 ringgit.
“The Malaysians are aggressively looking to sell their supplies because of the zero tax,” Patel said by phone from the western Indian city of Rajkot. India buys palm oil from Indonesia and Malaysia, and soybean oil from Brazil and Argentina.
Crude soybean oil imports probably jumped to 40,000 tons in December from 7,387 tons a year earlier, while sunflower oil purchases may have declined to 70,000 tons from 94,000 tons, the survey showed.
Cooking oil imports surged 17 percent to an all-time high of 10.2 million tons in the year ended Oct. 31, according to data from the extractors’ association. Inventories, including those at ports and in the pipeline, were 1.5 million tons as of Jan. 1, said Sandeep Bajoria, chief executive officer at Mumbai-based Sunvin Group.