Indian palm oil imports unlikely to rise despite plunge in prices

MUMBAI: India’s palm oil imports are unlikely to climb over November to January even as prices for the commodity plumb their lowest in three years, reined in by ample local supply of rival oilseeds and as a liquidity crunch hits would-be buyers, traders said.

The South Asian country is the world’s biggest importer of palm oil and is a key factor in international benchmark prices, which have fallen nearly a fifth so far in 2018.

“Imports won’t rise. There is a liquidity crunch and domestic oil availability is improving,” said Govindbhai Patel, managing director of trading firm G.G. Patel & Nikhil Research Co.

The nation’s imports in the first quarter of the 2018/19 marketing year that started on Nov 1 could average between 750,000 tonnes and 800,000 tonnes, Patel said. That is around levels expected to be recorded for the previous three months and compares to 758,000 tonnes at the same time in the last marketing year.

Supplies of summer-sown oilseeds such as soybeans and groundnuts have started to come to market and crushing has also been picking up this month, traders said. Production of soybeans, the main summer-sown oilseed, is expected to jump a fifth in 2018 from a year ago.

Malaysian palm oil futures fell over 1% yesterday evening to trade around three-year lows, tracking weakness in crude oil and on existing concerns over high palm stocks.

The benchmark palm oil contract for January delivery was down 1.3% at RM2,007 a tonne at the end of the trading day for a sixth consecutive day of losses. It earlier fell to an intraday low of RM2,006, its lowest levels since September 2015.

Leading industry analysts earlier this month said palm oil prices would improve next year as production growth eases and China shifts some of its vegetable oil demand to palm due to its trade dispute with the United States.

India buys palm oil from Indonesia and Malaysia, with its soyoil mainly imported from Argentina and Brazil. – Reuters