Cooking oil imports by India, the world’s largest palm oil buyer, probably advanced for a fourth straight month in March on rising domestic demand and a decline in global prices.
Purchases of vegetable oils, including those for industrial use, climbed 17 percent to 850,000 metric tons last month from 727,706 tons a year earlier, according to the median of estimates from five processors and brokers compiled by Bloomberg. Palm oil imports surged 50 percent to 700,000 tons from 465,484 tons, the survey showed. The Solvent Extractors’ Association of India will release the data tomorrow.
The surge in Indian imports may help trim palm oil stockpiles in Indonesia and Malaysia, the biggest producers, and stem a 34 percent decline in prices in Kuala Lumpur in the past year. Futures have fallen for four straight quarters in the worst run since 1999 on concern that demand will slow in Europe because of the debt crisis, boosting inventories.
“Consumption is increasing, while the local production is not enough to meet this demand,” Govindlal G. Patel, managing partner at GG Patel & Nikhil Research Co., said by phone. An increase in domestic rapeseed oil supplies may curb imports this month, he said.
India’s monthly domestic demand is about 1.45 million tons and is growing 5 percent annually, said Sandeep Bajoria, chief executive officer at Mumbai-based broker Sunvin Group. Imports of all cooking oils may surge to a record 11.5 million tons in the year that started Nov. 1, Vijay Data, president of the extractors’ association, said on Feb. 4.
The South Asian nation, 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.
“Domestically refined oil prices are higher than imported oil as soybean prices have gone up in the last few months and farmers are holding back their crops,” Ashok Sethia, executive director of Sethia Oils, said by phone from Kolkata.
Palm oil for delivery in June fell 1 percent to 2,371 ringgit ($783) a ton on the Malaysia Derivatives Exchange yesterday. Reserves in Malaysia fell 11 percent to 2.17 million tons in March from a month earlier, the steepest drop since January 2011, according to the nation’s palm oil board.
Cooking oil imports jumped 22 percent to 3.74 million tons in the four months through February, according to the extractors’ association. Stockpiles, including those at ports and in the pipeline, probably shrank to 1.6 million tons at the beginning of this month from a record 1.96 million tons in March, Bajoria said.
“Imports will slow now as stockpiles are high and importers will not be in a hurry to replace supplies,” Pradip Desai, managing director of Mumbai-based broker Palmtrade Services Pvt., said.
Crude soybean oil imports fell 40 percent to 60,000 tons in March from 100,615 tons a year earlier, while sunflower oil purchases may have fallen to 80,000 tons from 104,150 tons, the survey showed.
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Source : Bloomberg