India's vegetable oil imports in December climbed 13 percent to an 11-month high, data from a trade body showed, as poor local supply and fears the country would soon hike duties on overseas purchases of edible oils prompted traders to stock up.
The government finally hiked duties last week - to 10 percent on all refined edible oils, including palm oil, up from 7.5 percent - after fierce lobbying from domestic refiners desperate to curb a flood of cheap imports from Indonesia, the world's leading palm oil producer.
India snapped up 1.07 million tonnes of vegetable oils in December, data from the Solvent Extractors' Association of India (SEA) showed on Monday, the highest since arrivals hit a record 1.2 million in January 2013 and the second-highest level since volume restrictions on imports were removed in April 1994.
"The duty hike expectation led to a surge in the monthly imports," said B.V. Mehta, executive director of the Mumbai-based trade body.
Total overseas purchases of palm oil by India, the world's top importer of vegetable oils, rose 11.5 percent to 863,205 tonnes on month, the data showed. The market had expected a drop in shipments as cold weather solidifies the oil and makes it more expensive to heat up and use.
Imports of crude palm oil rose by a quarter from a month ago to 691,740 tonnes, while imports of the refined variant fell 21 percent to 164,026 tonnes despite being cheaper.
The cost of importing refined palm oil was lower than that for crude palm oil due to Indonesia's duty structure, with the average price of imported refined palmolein at $854 per tonne versus $864 per tonne for crude palm oil, SEA data showed.
Indian import duty is paid on top of these prices."Imports of refined oil may fall in January unless the top palm oil producer adjusts its tax structures," said a Mumbai-based trader.
Last week, an Indonesian minister said the country could review its duty policy after India raised the import duty.But India's refiners want an even higher duty, possibly as much as 14.5 percent, and say last week's move was too little and too late.
India buys palm oil mainly from Indonesia and Malaysia. Palm oil makes up 80 percent of the country's total vegetable oil imports and New Delhi brings in around 60 percent of its annual vegetable oil needs which average 17 to 18 million tonnes.
Increased buying by India has not lent support, however, to benchmark palm futures on Bursa Malaysia, as rising stocks continue to pressure prices there, which fell on Monday to their lowest in over two months.
India's imports of soyoil rose more than three-fold from a month ago to 53,500 tonnes in December, the SEA data showed, as a result of slow crushing and a lower soybean crop which was hit by late rains during the harvest season.India imports small quantities of soyoil from South America. (Editing by Jo Winterbottom and Himani Sarkar)
Source:- in.reuters.com
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