Palm oil imports by India, the world’s biggest buyer, declined for a second month in June as refiners bought more sunflower oil after prices retreated on rising global cooking oil supplies.
Purchases of crude and refined palm oils slid 8.8 percent to 592,749 metric tons last month from a year earlier, the Solvent Extractors’ Association of India said in an e-mailed statement today. That’s lower than the median estimate of 625,000 tons in a Bloomberg survey. Sunflower oil shipments jumped 53 percent to 155,475 tons, while crude soybean oil imports dropped 28 percent to 99,682 tons, the association said.
A decline in premium of sunflower and soybean oils over palm oil is spurring Indian refiners and traders to reduce purchase of the tropical oil, according to B.V. Mehta, executive director of the association. Declining palm demand in India may expand inventories in Indonesia and Malaysia, the world’s biggest producers, and pressure prices in Kuala Lumpur, which entered a bear market yesterday.
“Ukraine has a bumper crop of sunflower oil, so prices are bound to remain subdued in the coming months, and India will continue to buy the oil,” Mehta said. “The incremental growth in oil demand and a certain part of palm oil share are being taken over by the soft oils.”
Futures fell 2.1 percent to 2,298 ringgit ($721) a ton at close on Bursa Malaysia Derivatives yesterday, down 21 percent from the 2,901 ringgit settlement high on March 10. Soybean oil’s premium over palm, the world’s most-used cooking oil, narrowed to average about $94 a ton this year from $244 a ton in 2013, according to data compiled by Bloomberg.
Stockpiles Gain
“Palm oil imports will continue as it is the No. 1 cooking oil,” Mehta said. Purchases may total 8 million tons this year, compared with 8.3 million tons a year earlier, he said.
Cooking oil stockpiles at ports and scheduled shipments rose to 1.49 million tons on July 1 from 1.42 million tons a month earlier, data showed. Total imports, including for industrial use, fell 4 percent in June to 883,679 tons, the association said. Total cooking oil imports were little changed at 7.08 million tons in the eight months ended June from 7.15 million tons a year earlier, data showed.
Source:- bloomberg.com
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