MARKET DEVELOPMENT
UPDATE 1-India\'s July Refined Palm Oil Imports Drop for 2nd Month
UPDATE 1-India\'s July Refined Palm Oil Imports Drop for 2nd Month
15/08/2013 (Reuters) - India's imports of refined palm oil fell for a second straight month in July on high domestic stocks and a weak rupee that made overseas purchases expensive.
The drop in imports will bring some relief to the government as it struggles to curb dollar payouts and rein in a bulging current account deficit. It could also take some heat out of food inflation, which is on the rise again.
But shipments were still more than a year ago and continue to weigh on domestic refiners, who are operating below capacity and have been seeking an increase in duties to check imports of refined palm oil.
The world's top buyer of vegetable oils imported 213,853 tonnes of refined palm oil in July, the Solvent Extractors' Association said on Wednesday, down 28 percent from June but almost double the level seen a year ago.
Imports had hit a record 373,837 tonnes in May, the peak of a rising trend triggered by Indonesia's changes to export duties to make its refined product more attractive, while a narrower price gap with crude palm oil was another incentive.
"Imports fell due to high stock levels with the weakness in rupee value lending able support," said B.V. Mehta, executive director of the trade body, referring to the month-on-month drop in July shipments.
India's total edible oil stocks stood at around 2 million tonnes by the end of July, according the trade body, close to a record high of 2.1 million tonnes hit at the start of April. SEA's estimates includes stocks lying at various ports and also those in pipelines.
Importers did not buy much although palm oil eased by $26-$32 a tonne, cost and freight, last month as they hoped domestic prices would come down amid projections for a higher summer oilseeds crop.
Indian farmers have planted about 15 percent more land with soybean this year as the government has raised support prices.
Total palm oil imports dropped by 14 percent to 577,753 tonnes in July from the previous month.
The rupee lost 1.7 percent against the dollar in July, its third straight month of losses. It hit a record low level last week.
Imports of all vegetable oils, including non-edible oil, eased 6.1 percent to 889,493 tonnes in July.
But soyoil imports rose by 69 percent to 234,650 tonnes from a month ago as local supplies from the previous harvest were almost exhausted and this year's crop is still being planted.
At Mumbai port, imported crude soyoil averaged $955 per tonne in July, down 6.1 percent from the previous month.
India buys mainly palm oils from Malaysia and Indonesia and a small quantity of soyoil from Brazil and Argentina.
It imports about 60 percent of its cooking oil demand of 17-18 million tonnes, with palm oil's share at about 80 percent. In the oil marketing year to Oct. 31, 2013, cooking oil imports could rise 10 percent on the year to 11 million tonnes.
The drop in imports will bring some relief to the government as it struggles to curb dollar payouts and rein in a bulging current account deficit. It could also take some heat out of food inflation, which is on the rise again.
But shipments were still more than a year ago and continue to weigh on domestic refiners, who are operating below capacity and have been seeking an increase in duties to check imports of refined palm oil.
The world's top buyer of vegetable oils imported 213,853 tonnes of refined palm oil in July, the Solvent Extractors' Association said on Wednesday, down 28 percent from June but almost double the level seen a year ago.
Imports had hit a record 373,837 tonnes in May, the peak of a rising trend triggered by Indonesia's changes to export duties to make its refined product more attractive, while a narrower price gap with crude palm oil was another incentive.
"Imports fell due to high stock levels with the weakness in rupee value lending able support," said B.V. Mehta, executive director of the trade body, referring to the month-on-month drop in July shipments.
India's total edible oil stocks stood at around 2 million tonnes by the end of July, according the trade body, close to a record high of 2.1 million tonnes hit at the start of April. SEA's estimates includes stocks lying at various ports and also those in pipelines.
Importers did not buy much although palm oil eased by $26-$32 a tonne, cost and freight, last month as they hoped domestic prices would come down amid projections for a higher summer oilseeds crop.
Indian farmers have planted about 15 percent more land with soybean this year as the government has raised support prices.
Total palm oil imports dropped by 14 percent to 577,753 tonnes in July from the previous month.
The rupee lost 1.7 percent against the dollar in July, its third straight month of losses. It hit a record low level last week.
Imports of all vegetable oils, including non-edible oil, eased 6.1 percent to 889,493 tonnes in July.
But soyoil imports rose by 69 percent to 234,650 tonnes from a month ago as local supplies from the previous harvest were almost exhausted and this year's crop is still being planted.
At Mumbai port, imported crude soyoil averaged $955 per tonne in July, down 6.1 percent from the previous month.
India buys mainly palm oils from Malaysia and Indonesia and a small quantity of soyoil from Brazil and Argentina.
It imports about 60 percent of its cooking oil demand of 17-18 million tonnes, with palm oil's share at about 80 percent. In the oil marketing year to Oct. 31, 2013, cooking oil imports could rise 10 percent on the year to 11 million tonnes.