India Jan palm, soy oil imports seen up

Friday, 10 February 2012 12:53

NEW DELHI: India's palm oil imports may have risen in January over the previous month as domestic supplies run out, a Reuters survey showed on Friday, but the imports could fall this month with start of the rapeseed harvest season.

Palm oil imports the bulk of India's edible oil purchases rose 3.1 percent last month to 569,750 tonnes, according to the survey of eight traders, with soyoil imports seen up 360.3 percent to 34,000 tonnes over December.

India mainly buys palm oils from Indonesia and Malaysia, and small quantities of soyoil from Argentina and Brazil. About half of India's 15-16 million tonnes of edible oils demand is met through imports.

The survey suggested total vegetable oil imports, including non-edible oils, would rise 6.6 percent in January to 714,375 tonnes from the previous month.

"Imports rose as local supplies almost dried and a gain in rupee also helped," said Sat Narain Agarwal, a Delhi-based trader, giving reasons for the rise in month-on-month imports.

The Indian rupee logged its best monthly gains in over 17 years by strengthening about 7.45 percent against the dollar in January, making the imports of cooking oil cheaper.

Traders imported about 80,000 tonnes of sunflower oil as the cooking oil variety was cheaper than substitute soyoil by about $25 per tonne in January.

Soft oils such as soy and sunflower are preferred during the wedding season in winter as they do not solidify unlike palm oil.

Higher imports in January, the third month of the oil year, are likely to push up stocks at Indian ports, the survey showed, with the month's end stocks seen rising 34 percent to 534,285 tonnes from December.

Traders said the vegetable oil imports could drop in February with the start of the harvest season for rapeseed, the main oilseed crop in winter.

"Edible oil imports could be around 650,000 tonnes in February," said Govindbhai G. Patel, a trader based in Rajkot.

India's rapeseed output could fall by a quarter in 2012, meaning that vegetable oil imports by the world's top buyer could rise by about half a million tonnes in the import year ending Oct. 31.

Higher imports due to lower rapeseed output in 2012 could push up Malaysia's benchmark palm oil futures prices which lost 2.4 percent this year.

Last year, vegetable oil imports fell after a gap of five years on higher local oilseed supplies, but a growing population and higher incomes are expected to boost demand this year.

India, the world's top vegetable oil buyer, imported 8.4 million tonnes of cooking oil in the marketing year to October, down 4.5 percent from the previous year.