Top Palm Buyer Cuts Imports First Time in a Year on Reservesby
Monthly vegetable oil purchases seen at 1.3-1.5 million tons
Soybean oil imports probably climbed more than five-fold
Palm oil purchases by India probably fell in December, the first decline in 2015, as record stockpiles in the world’s largest buyer prompted traders and refiners to slow shipments.
Imports dropped 7.9 percent to 770,000 metric tons last month from a year earlier, according to the median of estimates from five processors and brokers compiled by Bloomberg. Total vegetable oil purchases, including soybean oil climbed 21 percent to 1.38 million tons, the survey shows. The Solvent Extractors’ Association of India releases data in the middle of the month.
Stockpiles in India surged to an all-time high last month after traders boosted imports on concern that the first back-to-back shortfall in monsoon rain in three decades will shrink the oilseed harvest and worsen a cooking oil deficit. The country, which depends on overseas supplies to meet 70 percent of its needs, will still import 1.3 million tons to 1.5 million tons of vegetable oils each month for the next year, according to Sunvin Group, a Mumbai-based broker and consultant for oil and oilseed industry.
“Higher stocks at ports and in the pipeline by the end of November kept palm oil imports lower,” said Nagaraj Meda, managing director of Hyderabad-based TransGraph Consulting.
Vegetable oil stockpiles jumped to a record 2.43 million tons on Dec. 1, compared with a monthly requirement of 1.6 million tons, according to the extractors’ association. The government should increase the tax on imports of refined cooking oils to 27.5 percent from 20 percent now to curb cheap supplies and protect domestic oilseed crushers, the association said on Dec. 21.
India buys palm oil from Indonesia and Malaysia and soybean oil from the U.S., Brazil and Argentina. Vegetable oil imports may climb to a record for a second year, increasing to 15.2 million tons in the 12 months that began Nov. 1 from 14.6 million tons, Sandeep Bajoria, chief executive officer of Sunvin Group, said last month.
“Higher imports will continue because of low production and as farmers are also not selling their crop,” Ashok Sethia, a director at Sethia Oils Ltd., said by phone from Kolkata.
India’s monsoon-sown oilseed harvest is seen declining 11 percent to 12.6 million tons this year from a year earlier, the Central Organisation for Oil Industry & Trade said in October.
Palm oil in Kuala Lumpur jumped 6 percent in December to cap the best year since 2010 as the strongest El Nino in almost two decades parches crops in Southeast Asia and trims record stockpiles. Futures on Bursa Malaysia Derivatives closed 0.4 percent lower at 2,402 ringgit ($546) a ton on Thursday.
Soybean oil imports probably climbed more than five-fold to 490,000 tons in December from a year earlier, while sunflower oil purchases dropped 34 percent to 100,000 tons, according to the survey. Canola oil purchases were 25,000 tons, the survey showed.
|Imports||Dec. 2015 (Survey)||Nov. 2015 (SEA)||Dec. 2014 (SEA)|
|Total Vegetable Oil||1,380,000||1,342,435||1,139,586|
*Figures in metric tons.
* Palm oil includes crude, refined and crude palm kernel oil.