Weak Rupee Cuts India's August Vegetable Oil Imports By A Fifth: Survey

11-Sep-2013



India's vegetable oil imports likely fell nearly 20 percent in August from a month ago as the weak rupee made purchases more expensive, a Reuters survey showed, bringing some small relief on the economic front to the government.



India is the world's biggest buyer of vegetable oils and its imports cost around $10 billion last fiscal year - about 2 percent of the total value of Indian imports. New Delhi needs to curb imports as the steep fall in the rupee hikes costs and swells its current account deficit.



The rupee lost about 16 percent in value between June 1 and Aug. 31, hiking prices of dollar-denominated imported vegetable oils. At the same time, a heavy monsoon means there should be ample local supply, cutting dependence on imports.



Imports of all vegetable oil, including non-edible oil, slid to 713,333 tonnes in August, according to the average estimate of six traders surveyed. The Solvent Extractors" Association of India will release its official data later this week.



India buys mainly palm oil from Malaysia and Indonesia and a small quantity of soyoil from Brazil and Argentina.



It imports about 60 percent of its cooking oil demand of 17 million to 18 million tonnes. Palm oil makes up about 80 percent of the imports.



In the year to Oct. 31, 2013, cooking oil imports could rise 10 percent on the year to 11 million tonnes, estimated the country's top importer of edible oil in March.



Higher costs likely cut total palm oil imports in August by 14 percent to 496,833 tonnes from the previous month, the survey showed. Refined palm oil imports probably tumbled 51 percent to 104,800 tonnes to mark its third straight monthly drop, the average of the survey showed.



Imported refined palm oil averaged $813 per tonne in August on the country's west coast, while the delivered price for crude palm oil was $808 per tonne. That spread was slightly wider than about $4 per tonne in the previous month, traders said.



Soyoil imports may have fallen 42.5 percent in August, according to the survey, on low seasonal demand and a strong production outlook given higher than average monsoon rains.



In India, soybean is the main summer season oilseed crop which is planted in June and July as the monsoon progresses over the growing areas of central and western India.



High global prices for soyoil because of concerns about bean supply in the U.S. Midwest due to dry weather conditions also likely curbed appetite for imports.



At Mumbai port, imported crude soyoil averaged around $965 per tonne in August, up $10 per tonne from the previous month.



Traders said as sunflower oil were nearly on par with soyoil prices, imports of the former probably rose last month. In August, imported sunflower oil was quoted around $960 per tonne on India's west cost.



"In September, imports could be around 800,000 tonnes of edible oils as the Indian currency gradually recovers its lost ground," said Sat Narain Agarwal, a Delhi-based trader.



Traders in the survey estimated vegetable oil stocks at Indian ports at the end of August had fallen by about a third to an average of 475,000 tonnes from July. Domestic refiners have been using old stocks to avoid costly imports, the traders said.



Source:- economictimes.indiatimes.com