MARKET DEVELOPMENT
March Palm Oil Imports Fall as Traders Draw on Stocks
March Palm Oil Imports Fall as Traders Draw on Stocks
12/04/2013 (Economic Times) - India's palm oil imports fell for a second straight month in March as refiners tapped record stockpiles and purchases by the world's biggest buyer continued to suffer from a January hike in import duty, a Reuters survey showed on Thursday.
Palm oil imports are forecast to have dropped 16.6 per cent to an average of 671,429 tonnes in March, the survey of seven traders showed, including about 150,000 tonnes of refined palm oil imports, up 29 percent from the previous month.
The boost to refined palm oil comes as the spread between the two variants has narrowed. Imported refined palm oil was quoted at $850 per tonne on the country's west coast, while the delivered price for crude palm oil was $835 per tonne -- reducing the spread from $30 to $35 a tonne a month ago.
Imports of all vegetable oils, including non-edible oils, fell 13.8 percent to 835,857 tonnes in March, mainly due to the drop in palm oil imports, the survey showed.
"Imports slowed due to huge stocks built up due to cheap palm oil imports in the previous months," said Sandeep Bajoria, chief executive of edible oil importer Sunvin Group, based in Mumbai.
India's total edible oil stocks at the end of February rose 12 percent from January to an all-time record of 2 million tonnes, or nearly 40 days of consumption against the usual stock of a month, according to the Mumbai-based trade body Solvent Extractors' Association.
The survey showed average estimated stocks at Indian ports at the end of March could go down 18 percent to 725,000 tonnes from February. SEA's stock figures include those in transit from ports.
India's palm oil imports hit an all-time high in January as leading producers Indonesia and Malaysia made their exports more attractive by varying tax levels.
But India retaliated, slapping a 2.5 percent duty on crude palm oil during the second half of January. As a result, imports fell in February and are expected to decline further in March.
Traders said the stocks drawdown was exacerbated by a rise in crude palm oil prices, with Malaysian palm oil futures touching their highest since Feb. 25 on March 21.
Bajoria also said imports had been cut by higher domestic cooking oil supplies as the rapeseed harvest season peaked last month. Rapeseed is the main oilseed crop grown in the winter.
"Imports in April could be at least 800,000 tonnes," said Pradip Desai, a Mumbai-based trader.
India imports about 60 percent of its cooking oil demand of 17 million tonnes, with palm oil's share at nearly 80 percent. In 2011/12, the country imported 10 million tonnes of cooking oil.
As India's population grows in size and wealth, demand for cooking oils is rising. New Delhi tries to encourage local oilseed production, partly by guaranteeing minimum prices to farmers, but has had limited success.
India buys mainly palm oils from Malaysia and Indonesia and a small quantity of soyoil from Brazil and Argentina.
Soyoil and sunflower imports are also expected to have declined last month as demand faded at the tail end of the marriage season.
Soyoil imports may have fallen 5.3 percent to 59,000 tonnes last month, while sunflower imports could fall by 16.1 percent to 70,714 tonnes from the previous month.
SEA will release its March import data on Friday.
Palm oil imports are forecast to have dropped 16.6 per cent to an average of 671,429 tonnes in March, the survey of seven traders showed, including about 150,000 tonnes of refined palm oil imports, up 29 percent from the previous month.
The boost to refined palm oil comes as the spread between the two variants has narrowed. Imported refined palm oil was quoted at $850 per tonne on the country's west coast, while the delivered price for crude palm oil was $835 per tonne -- reducing the spread from $30 to $35 a tonne a month ago.
Imports of all vegetable oils, including non-edible oils, fell 13.8 percent to 835,857 tonnes in March, mainly due to the drop in palm oil imports, the survey showed.
"Imports slowed due to huge stocks built up due to cheap palm oil imports in the previous months," said Sandeep Bajoria, chief executive of edible oil importer Sunvin Group, based in Mumbai.
India's total edible oil stocks at the end of February rose 12 percent from January to an all-time record of 2 million tonnes, or nearly 40 days of consumption against the usual stock of a month, according to the Mumbai-based trade body Solvent Extractors' Association.
The survey showed average estimated stocks at Indian ports at the end of March could go down 18 percent to 725,000 tonnes from February. SEA's stock figures include those in transit from ports.
India's palm oil imports hit an all-time high in January as leading producers Indonesia and Malaysia made their exports more attractive by varying tax levels.
But India retaliated, slapping a 2.5 percent duty on crude palm oil during the second half of January. As a result, imports fell in February and are expected to decline further in March.
Traders said the stocks drawdown was exacerbated by a rise in crude palm oil prices, with Malaysian palm oil futures touching their highest since Feb. 25 on March 21.
Bajoria also said imports had been cut by higher domestic cooking oil supplies as the rapeseed harvest season peaked last month. Rapeseed is the main oilseed crop grown in the winter.
"Imports in April could be at least 800,000 tonnes," said Pradip Desai, a Mumbai-based trader.
India imports about 60 percent of its cooking oil demand of 17 million tonnes, with palm oil's share at nearly 80 percent. In 2011/12, the country imported 10 million tonnes of cooking oil.
As India's population grows in size and wealth, demand for cooking oils is rising. New Delhi tries to encourage local oilseed production, partly by guaranteeing minimum prices to farmers, but has had limited success.
India buys mainly palm oils from Malaysia and Indonesia and a small quantity of soyoil from Brazil and Argentina.
Soyoil and sunflower imports are also expected to have declined last month as demand faded at the tail end of the marriage season.
Soyoil imports may have fallen 5.3 percent to 59,000 tonnes last month, while sunflower imports could fall by 16.1 percent to 70,714 tonnes from the previous month.
SEA will release its March import data on Friday.