NEW DELHI (June 13): Palm oil imports by India, the world’s biggest buyer, probably fell in May to the lowest since February 2014, as higher taxes on shipments curbed demand.
Purchases fell about 37% to 502,000 metric tons from a year earlier, according to the median of five estimates in a Bloomberg survey of processors, brokers and analysts. Total vegetable oil imports decreased about 9.6% to 1.25 million tons, the survey showed. The Solvent Extractors’ Association of India is expected to release its monthly trade numbers this week.
A slump in imports by India may put further pressure on palm, which has fallen 7.7% this year on concerns demand from key buyers is waning after a duty increase by India and on expectations supplies in Indonesia and Malaysia will increase. Palm oil futures on Bursa Malaysia Derivatives fell as much as 1.1% on Wednesday to 2,300 ringgit (US$576) per ton, the lowest intraday level for the most-active contract since July 2016.
“Palm oil has a higher duty and that’s reducing demand,” said Sandeep Bajoria, chief executive officer of Sunvin Group, a Mumbai-based broker and consultant for the oilseeds industry.
Palm oil purchases may fall to about 500,000 tons in June, as soft oil imports are rising, he said.
India’s soybean oil purchases, mainly from the U.S., Brazil and Argentina, rose about 13% to 385,000 tons, the survey showed. Sunflower oil imports more than doubled to 334,000 tons.
Canola oil imports were estimated at 25,000 tons.
“An anticipation of a hike in import duties for soft oils has prompted buyers to boost imports of soybean and sunflower oils,” said Nagaraj Meda, managing director of Hyderabad-based TransGraph Consulting Pvt. Also, a narrowing spread between soybean oil and crude palm oil boosted soybean oil purchases and curbed palm imports, he said.
|Imports||May 2018 (Survey)||April 2018 (SEA)||May 2017 (SEA)|
|Total Vegetable oil||1,252,000||1,386,466||1,384,439|
NOTE: Figures in metric tons