Kuala Lumpur: India’s booming edible oil imports are expected to decline or hold flat in the year to October 2017, failing to grow for the first time in six years, as near record domestic oilseed output boosts supplies, industry executives said.
India, the world’s biggest edible oil importer, is expected to purchase about 14 to 14.5 million tonnes of vegetable oil this year, compared with 14.5 million tonnes in 2015/16.
“We are going to have an additional 1.15 million tonnes of edible oil this year. It’s because of higher soybean production last year and expectations of a bumper rapeseed crop which will be harvested in the coming months,” said Sandeep Bajoria, chief executive of Mumbai-based brokerage Sun Win Group.
India’s edible oil purchases—mainly palm oil from Malaysia and Indonesia and soybean oil from Argentina—have risen each year since 2010/11, according to US Department of Agriculture data, growing at an average of around 11% a year.
B.V. Mehta, executive director of Solvent Extractors Association of India estimated Indian edible imports this year will fall to around 14 million tonnes this year.
The benchmark Bursa Malaysia crude palm oil futures fell to their lowest since early November last week on slowing demand and the outlook for higher production, although the market has since picked up on technicals and price gains for rival soybean oil.
The Chicago Board of Trade soyoil futures gained 5.4% last week, the biggest weekly gain since late November on expectations of higher use in biodiesel production in the United States.
India’s soybean production, harvested in October, rose to 11.5 million tonnes, up from 7 million tonnes a year ago, the biggest annual output jump in more than a decade, boosting supplies and dragging down prices.
Rapeseed production is forecast to rise to 7 million tonnes, from 5.8 million tonnes a year ago, Sun Win’s Bajoria said.
India’s soybean oil imports are expected to decline to 3.4 million tonnes from 4.3 million tonnes a year ago because of ample domestic supplies, Bajoria said, while palm oil imports are forecast to rise to 8.75 million tonnes this year from 8.35 million tonnes.