Palm Oil import bounces in India as weather trims oilseed harvest
Import of palm oil by India bounced after its first drop in a year. Indian refiners and oil traders boosted their purchase in order to fill the gap in the growing palm oil shortage.
In January, palm oil imports jumped 4% to 686,000 metric tons from a previous year, as per the average estimate of five brokers and processors collected by Bloomberg. Foreign imports declined 5.8% during December, the first fall from 2014 end. However, total purchases of vegetable oil amounted to 1.25 million tons, an increase of 14% from previous month.
Nearly 70% of India's palm oil requirements is met by foreign supplies. The country is increasing its palm oil imports as the deficit monsoon rainfall reduced India's oilseed harvest. The growing demand for cooking oil in India may help Kuala Lumpur futures to widen its profit amid the declining supplies from top palm oil producers like Malaysia and Indonesia.
On Friday, Kuala Lumpur commodities jumped as high as 14% to 2,632 ringgit per ton, the topmost side since 2014 April. Bloomberg quoted Godrej's director Dorab Mistry, who said that costs of palm oil may jump as much as 2,700 ringgit during the second quarter because of the fall in worldwide inventories and supplies.
As per the association, demand for cooking oil in India is predicted to rise as high as 75% to 35 million tons within 2025 as the growing population and huge incomes enhance the consumption of palm oil. Meanwhile, in 2015 - 2016, net purchases of cooking oil is anticipated to increase as high as 16 million tons from 14.4 million tons last year.
The Central Organisation for Oil Industry & Trade expects oilseed harvest in the monsoon to fall 11% to 12.6 million tons in 2016. There will be a continuous rise in cooking oil imports as the harvest in India is lower amid the increasing oil consumption, Bloomberg said citing Sandeep Bajoria, CEO of Sunvin Group.
Meanwhile, the government of India is looking to remove duties on utilized cooking oil import in order to enhance its utility as a cheap transportation fuel, MENAFN said quoting Nitin Gadkari, minister of Indian transportation. According to Nitin, the used oil will aid in producing bio-diesel and it is economical than the petroleum diesel.
The deputy CEO of Science & Environment at Malaysian Palm Oil Council, Kalyana Sundram said THE HINDU BusinessLine that Malaysia is very eager to provide marketing back up for palm oil growers and manufacturers of palm products in India. He also pointed out that the agriculture of oil palms in India is very small.
According to him, the nation intakes nearly 9.7 million tons of palm oil that become a vital component of India's eatable oil trends. Sundram also said that MPOC is working hard with domestic agencies in India to provide correct information regarding the quality, nutrition and health values of the Malaysian palm oil.
India also purchases soybean oil from overseas suppliers, which surged 89% to 425,000 tons during last month. Currently, India depends mainly on its foreign palm oil suppliers to meet its growing demand as the weather betrays oilseed harvest.