Palm Oil Imports by India Surge 23% Record as Prices Slump, Malaysia Scraps Export Tax

Palm oil shipments by India, the world’s biggest buyer, will climb to a record this year as tumbling prices and zero-tax on exports from Malaysia make the oil attractive to refiners, said Ruchi Soya Industries Ltd. (RSI)

Inbound shipments may increase to 9 million metric tons in the year ending Oct. 31, more than the 8 million tons estimated in July, Dinesh Shahra, managing director of the nation’s biggest importer, said. Purchases were at 8.3 million tons in 2012-2013, the highest ever, data from the Solvent Extractors’ Association of India show.

Palm and soybean oils slumped to the lowest in five years this month as forecasts for record supplies threatened to widen a glut in global cooking oils. Palm will drop in the next few weeks toward the cost at which growers in Asia produce the world’s most-used cooking oil, Dorab Mistry, director at Godrej International Ltd., said Sept. 15. The decline spurred Malaysia, the world’s second-biggest grower, to scrap export tax on crude palm oil for two months through October to boost shipments.

Rising Demand

India’s imports of vegetable oils, including those for industrial use, may jump to an all-time high of 13 million tons this year, said. The country bought 10.7 million tons in 2012-2013, according to the extractors’ association.

Soybean oil shipments will jump to more than 2 million tons and sunflower oil imports may climb to 1.6 million to 1.7 million tons. Soybean oil prices in Chicago have dropped 17 percent this year, reaching 31.52 cents a pound on Sept. 10, the lowest since 2009.

India buys more than 50 percent of its annual demand, shipping palm oil from Indonesia and Malaysia, and soybean oil from the U.S., Brazil and Argentina. Imports rose 8 percent to 9.53 million tons in the 10 months through August from a year earlier, the extractors’ association estimates.

Domestic soybean production may decline to 9.5 million tons to 10.5 million tons in the crop year starting Oct. 1 from 11 million tons predicted in July because of inconsistent monsoon rainfall, lower acreage and some crop losses during the germination stage, Shahra said.

Plantings of oilseeds fell to 17.68 million hectares (43.69 million acres) from 19.25 million hectares a year earlier, the Agriculture Ministry said on 22 Sept. Monsoon rains were 11 percent less than the 50-year average since June 1, the India Meteorological Department said yesterday.