Palm Imports By India Tumble To Lowest In 34 Months On Prices

Palm oil imports by India, the world’s biggest buyer, slumped to the lowest since April 2011 last month as prices surged on production concerns and local refiners idled capacities because of falling profit margins.

Purchases of crude and refined palm oils plunged 50 percent to 393,828 metric tons from a year earlier, Mumbai-based Solvent Extractors’ Association of India said in an e-mailed statement today. Shipments were lower than the 550,000 tons estimated in a Bloomberg survey. Total imports, including for industrial use, tumbled 40 percent to 578,975 tons, the association said.

Futures jumped to the highest level in almost 18 months this week after data showed that palm oil output in Malaysia, the world’s second-largest producer, dropped last month to the lowest since April 2012 and as a dry spell sweeping most of Southeast Asia threatened to hurt production later this year.

“The dry spell in Indonesia and Malaysia is hitting us as prices have gone up,” B.V. Mehta, executive director of the trade group, said by phone from Mumbai. “There is a disparity in importing palm products, and many refineries are lying idle. Today, RBD palm olein is $15-$20 a ton cheaper in India than crude palm oil. Who is a fool to import CPO?”

Indonesia set the export tax on refined bleached and deodorized, or RBD, palm olein at 2 percent for March, compared with a 10.5 percent tariff on crude oil. India imposes a duty of 2.5 percent on crude edible oil imports, while the levy on refined varieties is 10 percent.

Crude soybean oil imports jumped 54 percent to 96,420 tons in February from a year earlier, while sunflower oil purchases fell 31 percent to 57,950 tons, the association said. The country purchased 11,489 tons of canola oil last month, it said.

Futures climbed to 2,916 ringgit ($889) a ton on Bursa Malaysia Derivatives on March 11, the highest price since September 2012, and were at 2,783 ringgit at 5:07 p.m. in Kuala Lumpur today. Palm oil’s discount to soybean oil narrowed to $90.337 a ton from an average of $192.67 in the past year, according to data compiled by Bloomberg.

Stockpiles at ports and due to arrive in India fell to 1.25 million tons as of March 1 from 1.52 million tons a month earlier, data showed.

“People are waiting for prices to fall,” Mehta said. “Only then will they start refilling supplies which are lower than the normal levels of 1.4 million tons a month. For now, new rapeseed crop is due and supply will be comfortable.”

India’s total cooking oil imports dropped 6 percent to 3.5 million tons in the four months ended February, the association said. Imports during 2013-2014 may total 10 million tons to 11 million tons, compared with 10.7 million tons a year earlier, Mehta said.

Source:- bloomberg.com