India's edible oil imports are expected to jump to a record high this year, as a drop in domestic oilseed output prompts buyers to ramp up purchases to meet growing demand at home, industry officials said. Higher shipments by the world's top edible oil importer, which is also the leading palm oil buyer, will give legs to a recovery in benchmark palm prices that have risen over 4 percent this year after an almost 15 percent drop in 2014.
"India's soyabean and rapeseed crops are lower and demand is rising every year due to increasing population," Sandeep Bajoria, chief executive of Mumbai-based Sunvin Group told Reuters at an industry conference in Kuala Lumpur. He expects India to import 12.8-13 million tonnes of edible oils in the year to October, a record high, versus 11.6 million tonnes a year ago. Palm will account for 9 million tonnes of the total, up 1 million tonnes, he said.
Nearly 60 percent of India's annual edible oil demand of 18-19 million tonnes is met by imports, consisting mainly of palm oil sourced from Indonesia and Malaysia. "Indian per capita consumption is rising very fast, thanks to higher economic growth," said B.V. Mehta, executive director of the Solvent Extractors' Association of India.
"In particular the middle class, their income is rising. They spend maximum on food, and edible oil is one of it," said Mehta, who sees India's edible oil imports this year at 12.5 million tonnes and pegged palm arrivals at 8.65 million tonnes. Soft oil imports, including soyaoil, are estimated at 4 million tonnes, up from 3.6 million tonnes, the officials said. Lower stockpiles of edible oil in India will encourage buyers to boost purchases in the months ahead, Bajoria said.
"India doesn't have high stocks of palm at the moment," he said. "Overall port and pipeline edible oil stocks are at around 1.7 million tonnes. At one point at end-December they were at 2.1 million tonnes." A move by top palm producers Indonesia and Malaysia to keep crude palm export taxes at zero could encourage India to import more, although bulging global supplies of rival soyabean oil may erode some demand.
Brazil and Argentina are on track for an all-time high soyabean production, adding to last year's record US output. Currently, crude palm oil is quoted at $685 a tonne, including cost and freight, in India for March shipment while soyabean oil is priced at $815 a tonne. But soyabean oil for April, May and June delivery is at $760 a tonne. "Looking forward, there's pressure on soya prices because of the big South American crop," Bajoria said.
Comments
Comments are closed.