India edible oil imports may slow
Wednesday, 3 June 2009
NEW DELHI, June 2 (Bloomberg): India, the world's biggest buyer of vegetable oils after China, may slow the pace of imports after domestic stockpiles surged on record purchases, a trader said.
Cooking oil reserves probably climbed 55 per cent to 1.7 million metric tons in the seven months ended May, exceeding normal levels of 1.1 million tons, Govindlal G. Patel, director of Dipak Enterprise, said in a phone interview from Rajkot in western India.
A 53 per cent rally in world palm oil may cool as a result of fewer purchases by the South Asian nation. Prices have surged as soybean crops decline in Brazil and Argentina, and stockpiles in the US are forecast to reach a five-year low. Palm oil competes with soybean oil for applications in food and fuel.
"India will have to reduce the pace of imports as off-take has slowed in the local market," said Patel, who has traded the commodity for four decades. "The rush to buy large quantities of crude palm oil has slowed."
August-delivery palm oil declined as much as 1.5 per cent to 2,586 ringgit ($741) a metric ton on the Malaysia Derivatives Exchange. Earlier, futures gained as much as 1 per cent.
The price may reach 3,000 ringgit by August as a drop in soybean oil supplies boosts demand for palm oil, Patel said.
India may have purchased more than 800,000 tons of edible oils last month, including 700,000 tons of refined and crude palm oils, Patel said. Imports in May 2008 were 302,345 tons, data from the Solvent Extractors' Association of India shows.
Cooking oil imports surged 82 per cent in the six months to April 30 after the government scrapped import tax amid a decline in local oilseed output.
India in March scrapped a 20 per cent duty on imports of crude soybean oil four months after it was imposed to shield oilseed growers. Crude palm oil can be imported tax-free.
Production of oilseeds may drop to 28.12 million tons in the year ending June, down from 29.75 million tons a year earlier, the agriculture ministry said last month.
Cooking oil reserves probably climbed 55 per cent to 1.7 million metric tons in the seven months ended May, exceeding normal levels of 1.1 million tons, Govindlal G. Patel, director of Dipak Enterprise, said in a phone interview from Rajkot in western India.
A 53 per cent rally in world palm oil may cool as a result of fewer purchases by the South Asian nation. Prices have surged as soybean crops decline in Brazil and Argentina, and stockpiles in the US are forecast to reach a five-year low. Palm oil competes with soybean oil for applications in food and fuel.
"India will have to reduce the pace of imports as off-take has slowed in the local market," said Patel, who has traded the commodity for four decades. "The rush to buy large quantities of crude palm oil has slowed."
August-delivery palm oil declined as much as 1.5 per cent to 2,586 ringgit ($741) a metric ton on the Malaysia Derivatives Exchange. Earlier, futures gained as much as 1 per cent.
The price may reach 3,000 ringgit by August as a drop in soybean oil supplies boosts demand for palm oil, Patel said.
India may have purchased more than 800,000 tons of edible oils last month, including 700,000 tons of refined and crude palm oils, Patel said. Imports in May 2008 were 302,345 tons, data from the Solvent Extractors' Association of India shows.
Cooking oil imports surged 82 per cent in the six months to April 30 after the government scrapped import tax amid a decline in local oilseed output.
India in March scrapped a 20 per cent duty on imports of crude soybean oil four months after it was imposed to shield oilseed growers. Crude palm oil can be imported tax-free.
Production of oilseeds may drop to 28.12 million tons in the year ending June, down from 29.75 million tons a year earlier, the agriculture ministry said last month.