Mumbai: India, the world’s biggest buyer of vegetable oils after China, imported a record quantity of cooking oils in December as palm oil prices declined and local demand rose.
Purchases exceeded 700,000 tonnes, with palm oil making up more than 90% of the total, Dinesh Shahra, managing director of Ruchi Soya Industries Ltd, India’s biggest importer, said in a phone interview on Monday.
There was a rush to import and stockpile as prices dropped and most people expected government to impose duty, Shahra said. The South Asian country in April scrapped the tax on crude palm oil imports to bolster supplies and curb prices.
An increase in purchases by India may help support palm oil prices that have climbed to a three-month high in Malaysia, the second biggest producer of the commodity.
The vegetable oil slid 53% in the second half of 2008, after reaching a record in March, as production exceeded demand.
March-delivery palm oil advanced as much as 4.1% to 1,998 ringgit ($559) a tonne in Kuala Lumpur after the Malaysian Palm Oil Board said on Monday that stockpiles in December dropped from a record and exports rose to the highest, fueled by Indian demand.
Stockpiles declined 12% to 1.99 million tonnes (mt), while exports climbed to 1.61mt, the board said.
India bought 519,032 tonnes of palm oil in November, up from 347,320 tonnes a year earlier, the Solvent Extractors’ Association said last month. Crude palm oil purchases climbed 1% to 363,578 tonnes from a year ago, the association said. The government imposed a 20% duty on crude soya bean oil imports in November to shield oilseed growers from duty-free purchases, while allowing crude palm oil at zero duty. The nation didn’t import any soya bean oil in November. Most of what India is importing today is palm oil after the introduction of duty on crude soya bean oil, said Shahra. Palm oil will continue to enjoy advantage over soybean oil because of the duty differential.