Palm oil’s stunning rally likely dampened demand from top buyer

Palm oil’s stunning rally likely dampened demand from top buyer

(Dec 14): Palm oil imports by India, the world’s biggest buyer, probably slumped to a five-month low in November as rising prices curbed demand.

Inbound shipments likely fell almost 20% from a month earlier to 622,000 tons, according to GG Patel, managing partner of GGN Research. That compares with 668,363 tons in November last year.

A drop after bumper festival purchases could cap benchmark prices of palm oil, used in everything from cooking oil to shampoo. Futures in Malaysia rose almost 10% last month amid strong demand from India and China, and are hovering near an eight-year high. The tropical oil is at parity with soybean oil, instead of the usual discount, making it less competitive in some markets.

“There was a disparity between local and international prices,” Patel said in a phone interview. Domestic rates were 1,500 rupees (US$20) to 2,000 rupees per ton lower than global levels, he said.

Palm oil imports are expected to recover in December and may total as much as 725,000 tons before an expected increase in export duty by Malaysia in January, Patel said.

India probably imported about 252,000 tons of soybean oil last month, down from 277,955 tons in October, according to Patel. Sunflower oil purchases climbed to 221,000 tons from 170,580, he said.

Source : The Edge Markets

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