India slows palm oil imports as prices rally amid negative margins
23.11.2023 ( Reuters ) - MUMBAI - Indian buyers curtailed purchases of palm oil for December and January shipments due to rising prices and as refiners face negative margins after making heavy imports in the past few months, industry officials told Reuters on Thursday.
Lower purchases by the world's biggest importer of vegetable oils could lead to higher stocks of palm oil in key producers Indonesia and Malaysia, weighing on benchmark futures which are trading near their highest in level in two months.
"Traders are attempting to liquidate stocks accumulated at ports due to aggressive imports in recent months," Rajesh Patel, managing partner at edible oil trader and broker GGN Research told Reuters.
"Currently, there's no import parity. Older imported stocks are being offered at lower prices compared to the price of new shipments."
The landed cost of crude palm oil for December shipments on the west coast without import taxes is 77,500 rupees per metric ton, whereas already imported oil is being offered at 76,500 rupees, traders said.
Higher imports during July to September lifted vegetable oil stocks in India to 3.3 million tons on Nov. 1 from 2.46 million tons a year ago, according to the Solvent Extractors' Association of India.
Buyers are concerned that the recent price rise may not be sustainable, so they are placing new import orders cautiously, said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.
The slowdown in the new purchases could bring down imports in December and January, said a New-Delhi-based dealer with a global trade house.
Increasing supplies of local soyoil and cottonseed oil have also curbed import needs, he said.
India's palm oil imports in November are likely to fall to 770,000 metric tons from 1.1 million tons a year ago, said Patel of GGN Research.
Soyoil and sunflower oil imports in November could fall to 130,000 tons and 150,00 tons respectively, he said.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, and soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
Reporting by Rajendra Jadhav Editing by Bernadette Baum