MARKET DEVELOPMENT
PREVIEW-India Nov Palm Oil Imports to Drop on Weak Winter Demand
PREVIEW-India Nov Palm Oil Imports to Drop on Weak Winter Demand
11/12/2013 (Reuters) - India's palm oil imports could drop about 7 percent in November, their first monthly decline since August, on weaker demand at the start of the cold weather that solidifies the oil and makes it unusable, a Reuters survey showed.
But purchases by the top importer will still be up nearly 19 percent from a year ago as more wealth and substantial growth in its 1.2 billion population drives demand, indicating a good start to the 2013/14 marketing year after arrivals hit a record high of 8.3 million tonnes in 2012/13.
Malaysian palm oil futures could come under some pressure from the monthly drop in India's imports, but falling output from top producer Indonesia should help keep a floor under prices that are headed for a gain in 2013 after plunging around 35 percent over the past two years.
The average of the Reuters survey of six traders also forecast a 15 percent monthly drop in refined palm oil imports to 131,250 tonnes in November.
India imports mainly palm oils from Indonesia and Malaysia, and small quantities of soyoil from Argentina and Brazil.
Palm oil accounts for nearly 80 percent of the South Asian country's total cooking oil imports. India relies on imports for about 60 percent of its annual vegetable oil demand of 17-18 million tonnes.
"Imports are expected to drop in December as in the winter season the demand for palm oil shrinks due to its low freezing point," said Sat Narain Agarwal, a Delhi based trader.
Traders said monthly edible oil imports could fall for a second straight month in December as domestic supplies pick up.
An increase in home-grown oils pushed up average estimated vegetable oil stocks at Indian ports by 8.5 percent from a month ago to 691,667 tonnes at the end of November, the survey showed.
India's vegetable oil marketing year runs from November to October.
The Solvent Extractors' Association of India is expected to release its monthly import data for November later this week.
The following table gives traders' forecasts for India's vegetable oil imports in November 2013 in tonnes, with percentage change from the previous month and a year before.
---------------------------------------------------------------------- But purchases by the top importer will still be up nearly 19 percent from a year ago as more wealth and substantial growth in its 1.2 billion population drives demand, indicating a good start to the 2013/14 marketing year after arrivals hit a record high of 8.3 million tonnes in 2012/13.
Malaysian palm oil futures could come under some pressure from the monthly drop in India's imports, but falling output from top producer Indonesia should help keep a floor under prices that are headed for a gain in 2013 after plunging around 35 percent over the past two years.
The average of the Reuters survey of six traders also forecast a 15 percent monthly drop in refined palm oil imports to 131,250 tonnes in November.
India imports mainly palm oils from Indonesia and Malaysia, and small quantities of soyoil from Argentina and Brazil.
Palm oil accounts for nearly 80 percent of the South Asian country's total cooking oil imports. India relies on imports for about 60 percent of its annual vegetable oil demand of 17-18 million tonnes.
"Imports are expected to drop in December as in the winter season the demand for palm oil shrinks due to its low freezing point," said Sat Narain Agarwal, a Delhi based trader.
Traders said monthly edible oil imports could fall for a second straight month in December as domestic supplies pick up.
An increase in home-grown oils pushed up average estimated vegetable oil stocks at Indian ports by 8.5 percent from a month ago to 691,667 tonnes at the end of November, the survey showed.
India's vegetable oil marketing year runs from November to October.
The Solvent Extractors' Association of India is expected to release its monthly import data for November later this week.
The following table gives traders' forecasts for India's vegetable oil imports in November 2013 in tonnes, with percentage change from the previous month and a year before.
PRODUCT RANGE AVERAGE YR AGO MONTH AGO % CHANGE
(YR MONTH)
----------------------------------------------------------------------
Palm Oil 700,000-800,000 729,167 614,574 782,467 18.6 -6.8
Soyoil 36,000-100,000 80,200 14,160 97,023 466.4 -17.3
Sunflower 70,000-150,000 118,333 47,500 119,735 149.1 -1.2
Edible Oil 870,000-964,000 918,167 676,234 1005,225 35.8 -8.7
----------------------------------------------------------------------
Vegoil 886,000-980,000 934,167 700,371 1021,973 33.4 -8.6
----------------------------------------------------------------------
NOTE: The estimates are based on forecasts of six traders. Some of the traders
do not track imports of non-edible oils closely but traders generally expect
non-edible oils imports to be about 16,000 tonnes in November.