MARKET DEVELOPMENT
INTERVIEW-Ruchi Soya Expects India's Sunflower Oil Imports to Hit Record High
INTERVIEW-Ruchi Soya Expects India's Sunflower Oil Imports to Hit Record High
28/03/2014 (Reuters) - India's sunflower oil imports are likely to jump more than half to a record high in the year through October 2014, as it trims palm oil purchases on a likely drop in output from Indonesia and Malaysia, said an executive at India's biggest edible oil buyer.
A rise in sunflower oil imports would support prices that are under pressure due to a record crop in top producer Ukraine, but would cap palm oil prices that hit an 18-month high this month on the likely drop in output from Southeast Asia.
"We are expecting palm oil imports would drop significantly to around 7.4 million tonnes from 8.17 million tonnes last year due to price spreads in favour of soft oils," said Dinesh Shahra, managing director of Ruchi Soya Industries Ltd .
India is likely to buy 1.45 million tonnes of sunflower oil in 2013/14, up 54 percent form the previous year and higher than the previous record purchase of 1.1 million tonnes in 2011/12, Shahra told Reuters in an interview on Thursday.
India imports most of its sunflower oil from Ukraine and takes its palm oil from the top two producers Indonesia and Malaysia.
The price gap between crude sunflower oil and crude palm oil narrowed to $47 per tonne in February, compared with $430 per tonne during the same period last year, according data compiled by Solvent Extractors' Association (SEA).
Sunflower oil is usually significantly more expensive than palm oil and soyoil. Now it is available at a discount to soyoil and at slightly higher prices than palm oil.
After jumping 47 percent in the first three months of the marketing year that started on Nov. 1, 2013, India's sunflower oil imports moderated in February due to political turmoil in Ukraine and congestion at Indian ports, Shahra said.
But the imports should rise from March onwards, he added.
Ukraine has so far managed to keep most of its grain and commodity exports flowing despite being embroiled in a conflict over Russia's seizure of the Crimean peninsula.
Indians use vegetable oils to cook most of their famed curries. The country's rising prosperity and growing population have continually driven up its edible oil needs, even as domestic supply remains stagnant.
The spike in palm oil prices in the last few weeks on concerns that the El Nino weather pattern could trim the output forced Indian buyers to reduce purchases, Shahra said.
Malaysian palm oil futures hit 2,916 ringgit ($880) on March 11, the highest since mid-September 2012.
India's palm oil imports in February plunged to the lowest in nearly three years, data from the SEA showed.
Despite lower palm oil imports, the country's total edible oil imports are set to rise by 4 percent in 2013/14 to 10.8 million tonnes due to higher imports of competing oils such as sunflower and soyoil, Shahra said.
A rise in sunflower oil imports would support prices that are under pressure due to a record crop in top producer Ukraine, but would cap palm oil prices that hit an 18-month high this month on the likely drop in output from Southeast Asia.
"We are expecting palm oil imports would drop significantly to around 7.4 million tonnes from 8.17 million tonnes last year due to price spreads in favour of soft oils," said Dinesh Shahra, managing director of Ruchi Soya Industries Ltd .
India is likely to buy 1.45 million tonnes of sunflower oil in 2013/14, up 54 percent form the previous year and higher than the previous record purchase of 1.1 million tonnes in 2011/12, Shahra told Reuters in an interview on Thursday.
India imports most of its sunflower oil from Ukraine and takes its palm oil from the top two producers Indonesia and Malaysia.
The price gap between crude sunflower oil and crude palm oil narrowed to $47 per tonne in February, compared with $430 per tonne during the same period last year, according data compiled by Solvent Extractors' Association (SEA).
Sunflower oil is usually significantly more expensive than palm oil and soyoil. Now it is available at a discount to soyoil and at slightly higher prices than palm oil.
After jumping 47 percent in the first three months of the marketing year that started on Nov. 1, 2013, India's sunflower oil imports moderated in February due to political turmoil in Ukraine and congestion at Indian ports, Shahra said.
But the imports should rise from March onwards, he added.
Ukraine has so far managed to keep most of its grain and commodity exports flowing despite being embroiled in a conflict over Russia's seizure of the Crimean peninsula.
Indians use vegetable oils to cook most of their famed curries. The country's rising prosperity and growing population have continually driven up its edible oil needs, even as domestic supply remains stagnant.
The spike in palm oil prices in the last few weeks on concerns that the El Nino weather pattern could trim the output forced Indian buyers to reduce purchases, Shahra said.
Malaysian palm oil futures hit 2,916 ringgit ($880) on March 11, the highest since mid-September 2012.
India's palm oil imports in February plunged to the lowest in nearly three years, data from the SEA showed.
Despite lower palm oil imports, the country's total edible oil imports are set to rise by 4 percent in 2013/14 to 10.8 million tonnes due to higher imports of competing oils such as sunflower and soyoil, Shahra said.