Palm oil imports could hit 11-year low as soyoil rises

MUMBAI: India’s palm oil imports could drop by nearly a fifth as now cheaper soyoil takes more market share, following Indonesia’s curbs on palm oil exports and New Delhi allowing duty-free imports of soyoil, dealers said.

Palm oil imports by the world’s biggest vegetable oil importer in its marketing year ending on October 31 will fall 19% to 6.7 million tonnes, the lowest since 2010/11, according to the average forecast from five dealers. Soyoil imports could jump 57% to a record 4.5 million tonnes, they said. That shift could put pressure on Malaysian palm oil prices and may lift soyoil imports to record highs and support US soyoil futures prices.

India on Tuesday allowed duty-free imports of 2 million tonnes each of soyoil and sunflower oil for the current and next fiscal years ending March 31, as part of efforts to keep a lid on local edible-oil prices.

“The duty structure has made soyoil more attractive than palm oil,” said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and consultancy firm.

Crude palm oil was being offered in India at about $1,775 a tonne, including cost, insurance and freight, for June shipments, compared with $1,845 for crude soybean oil. However, since palm oil attracts 5.5% import tax, the effective price for Indian buyers is $1,873, said Bajoria.

In the first six months of the marketing year, India’s palm oil imports fell 15% to 3.23 million tonnes as Indonesia’s curbs crimped supplies and drove prices higher. Jakarta resumed palm oil exports from Monday, but industry players said shipments were unlikely to restart until details emerged on how much must be held back for domestic use. “We were expecting palm oil imports would improve in the second half, but Indonesian policy is not allowing exports to pick up,” said a dealer with a global trading firm.