India Palm Oil Imports Fall for Second Month as Demand Dropsby
Purchases may rebound in next three months on low prices
June soybean oil shipments seen more than doubling: survey
Palm oil imports by India probably fell for a second month in June as demand weakened and near-record stockpiles prompted traders and refiners to curb purchases.
Imports dropped 18 percent to 600,000 metric tons last month from a year earlier, according to the median of five estimates in a Bloomberg survey of processors, brokers and analysts. Total vegetable oil purchases, including soybean and sunflower oils, climbed 12 percent to 1.14 million tons, the survey showed. The Solvent Extractors’ Association of India is set to release import data in the middle of the month.
Palm oil futures in Malaysia, the global benchmark, entered a bear market on Tuesday due to weak demand from major users including India amid a seasonal increase in production. Losses may be exacerbated as stockpiles expand, according to Godrej International Ltd.’s Dorab Mistry.
“Poor off take of palm during April and May led to poor buying interest in Indian markets where soybean oil imports revived last month due to improved crushing in Argentina,” said Nagaraj Meda, managing director of Hyderabad-based TransGraph Consulting. The country relies on imports to meet more than 70 percent of its cooking oil needs.
Futures on Bursa Malaysia Derivatives rose 2.1 percent to 2,234 ringgit a ton by the midday break in Kuala Lumpur on Wednesday. Prices settled at 2,188 ringgit on Tuesday, 21 percent below this year’s closing high of 2,779 ringgit reached on March 29, meeting the common definition of a bear market.
India’s palm oil imports may rebound in the next three months on falling prices, said Sandeep Bajoria, chief executive officer of Sunvin Group, a Mumbai-based broker and consultant for the oil and oilseed industry. The premium between soybean oil and palm oil has widened recently, boosting demand for the tropical oil, he said.
Total cooking oil stockpiles were estimated at 2.33 million tons as of June 1, compared with a monthly requirement of 1.65 million tons, according to the extractors’ association. Inventories reached a record 2.51 million tons in January, association data show.
Soybean oil imports probably more than doubled to 315,000 tons in June from a year earlier, while sunflower oil purchases climbed 33 percent to 140,000 tons, according to the survey. Canola oil purchases were seen at 24,000 tons.
India buys palm oil from Indonesia and Malaysia and soybean oil from the U.S., Brazil and Argentina.
|Imports||June 2016 (Survey)||May 2016 (SEA)||June 2015 (SEA)|
|Total Vegetable oil||1,140,000||1,024,878||1,016,297|