Indian palm oil imports rose 5 per cent to 836,447 tonnes in December from a month earlier because of tight supplies of local soy oil plus the decision by big producers to allow duty-free exports of palm oil, which made overseas purchases cheaper.
The world's biggest edible oil importer is likely to make higher overseas purchases in January, too, after Malaysia decided to leave its palm oil exports duty-free until the end of February, industry officials said.
"Due to falling crude oil prices, biodiesel demand is quite weak for palm oil. That's why producers are trying to sell as much as they can to India," said BV Mehta, executive director of the Solvent Extractors' Association of India (SEA), a Mumbai-based trade body, Crude oil fell more than 1 per cent on Wednesday after touching its lowest in nearly six years on Tuesday.
"Farmers are holding back their soybean crop due to lower prices. It has been affecting soybean crushing and availability of soyoil in the country," said a Mumbai-based dealer. Soybean is the main summer-sown oilseed in India and its prices have fallen due to sluggish export demand for soymeal.
India's total vegetable oil imports in December fell 4.2 per cent from a month earlier to 1,139,586 tonnes as purchases of sunflower and soyoil dropped, data released by the SEA showed.
India mainly buys palm oil from Southeast Asia, with small quantities of soyoil from Latin America and sunflower from Ukraine. Edible oil stocks in India rose to a record 2 million tonnes on January 1 as lower prices prompted refiners to import more than the local requirement, Mehta said.
Source:economictimes.indiatimes.com
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