Palm Oil Imports by India Drop as Weakening Rupee Cuts DemandPrabhudatta Mishra
Palm oil imports by India, the world’s biggest buyer, declined for the first time in three months in July after a slump in the rupee to a record low increased costs for refiners.
Inbound shipments of crude and refined palm oils dropped 5.2 percent to 568,254 metric tons from 599,128 tons in July 2012, the Mumbai-based Solvent Extractors’ Association of India said in an e-mailed statement today. That beat a median estimate of 550,000 tons in a Bloomberg survey published yesterday. Imports of refined, bleached and deodorized palm olein surged 90 percent to 213,853 tons in July from 112,611 tons a year earlier, it said.
Falling Indian demand may expand stockpiles in Malaysia just as the world’s second-biggest supplier enters its high-output cycle. Production gained 18 percent to 1.67 million tons in July, the most in 10 months, the Malaysian Palm Oil Board said today. The rupee slumped to an all-time low this month on concern that the current-account deficit will widen from a record in the year ended March.
“India will not increase its inventory when palm oil prices are falling,” said B.V. Mehta, executive director of the extractors association. “Importers know that the output of oilseeds crops will exceed last year and palm oil is entering the high-production cycle, putting pressure on prices.”
Palm for delivery in October dropped 0.1 percent to 2,294 ringgit ($670) a ton on the Malaysia Derivatives Exchange in Kuala Lumpur. Futures tumbled to the lowest level in more than three years last month after dropping for five quarters.
Total vegetable oils imports, including for industrial use, gained 2.2 percent to 889,493 tons in July, the association said. Shipments rose 11 percent to 8.03 million tons in the nine months through July, it said. Crude soybean oil imports jumped to 234,650 tons in July from 156,720 tons a year earlier, while sunflower oil purchases declined to 62,300 tons from 80,101 tons, it said.
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.