New Delhi: Palm oil purchases by India climbed for a ninth month as traders and refiners increased shipments to meet an expected surge in demand during festivals.
Imports jumped 12% to 783,734 metric tons in September from a year earlier, the Solvent Extractors’ Association of India said in an e-mailed statement on Wednesday. That was less than the 800,000 tons median estimate in a Bloomberg survey published this week. Total vegetable oil purchases, including those for industrial use, climbed 16% to 1.22 million tons, while shipments in the 11 months through September surged 22% to a record 12.9 million tons, it said.
India, which depends on overseas supplies to meet more than 50% of its cooking oil needs, is buying record quantities this year as the first back-to-back shortfall in monsoon rainfall in three decades threatens its oilseed crops. Rising Indian demand for palm oil may help reduce stockpiles in Indonesia and Malaysia and drive further gains in prices.
“India is being used as a dumping ground for excessive supply of edible oils in the world market," the association said in the statement. “Excessive imports have put tremendous pressure on local prices, which are at a level where Indian oilseeds growing farmers are in distress and losing interest in oilseed crop. Country’s dependence on imported oil has further increased to nearly 70%, an alarming situation for the country’s food security."
India buys palm oil from Indonesia and Malaysia and soyabean oil from the US, Brazil and Argentina. Demand typically climbs during major Hindu festivals from September through November, when people consume more fried foods and sweets. Shipments may surge to a record 15 million tons in the year starting 1 November with palm oil accounting for as much as 10 million tons, according to Paul Bloemendal, commercial director at Ruchi Soya Industries Ltd., the nation’s biggest refiner.
Palm oil imports climbed 19% to 8.42 million tons in the 11 months through September while purchases of soft oils including soybean and sunflower oils surged 32% to 4.35 million tons, according to the extractors’ association.
Palm oil rallied into a bull market last month after entering a bear market just a month earlier helped by a weak Malaysian currency and a strengthening El Nino. Futures for delivery in December jumped 2.8% to close at 2,320 ringgit ($553) a ton on Bursa Malaysia Derivatives on Tuesday. The exchange is closed for a local holiday on Wednesday.
India’s soybean oil imports almost doubled to 321,062 tons in September from a year earlier, while sunflower oil purchases dropped 49% to 68,216 tons, the association said. Canola oil purchases were 32,495 tons, it said. Bloomberg