New Delhi: India, the world’s second-biggest palm oil importer, may purchase 36% more of the vegetable oil as lower tax makes it more attractive than soyabean oil.
Imports may rise to 3.23 million tonnes (mt) in the year ending October from 2.37 mt a year earlier, said Amol Tilak, an analyst at Mumbai-based Kotak Commodity Services Ltd. Soyabean oil purchases may rise 4.5% to 1.78 mt.
Increased imports by India may further deplete reserves in Malaysia, the world’s biggest producer of the commodity.
Demand for palm oil for food and alternative energy uses pushed up prices to an eight-year high on 16 April and reduced stockpiles at the end of March to the lowest since August 2005. Soyabean oil traded in Chicago has climbed 32% in the past year.
“Indian demand will obviously keep palm oil prices on the upper side,” said Tilak in an interview on 8 May.
The landed cost of palm oil is $41 (Rs1,681) a tonne less than soyabean oil because the base import price, which is used to calculate the import duty, hasn’t been changed since September, according to the Solvent Extractors’ Association in Mumbai. Import duty on palm oil has been cut twice in the past four months to boost supplies and slow inflation that reached a two-year high in January.