PALM oil purchases by India, the world’s biggest buyer, probably jumped for a third straight month as refiners took advantage of tax-free sales by Malaysia to meet festival demand.
Imports of the main crude and refined palm oils jumped 21 per cent to 750,000 tonnes in September from a year earlier, according to the median of estimates from five processors and brokers compiled by Bloomberg.
Total vegetable oil purchases, including for industrial use, probably rose 27 per cent to 1.1 million tonnes, the survey showed. The Solvent Extractors’ Association will publish the data next week.
Futures posted the biggest monthly gain since 2009 in September as Malaysia scrapped the tax on crude palm oil exports for two months to reverse a decline in prices to a five-year low.
With exports from Indonesia being tax-free as well this month, the trend of rising imports will continue, said Sandeep Bajoria, chief executive officer of Mumbai-based Sunvin Group.
The “removal of export duty in Malaysia coupled with the oncoming festive season triggered huge buying”, said Nagaraj Meda, managing director of TransGraph Consulting Pvt, on Tuesday.
“Indian importers are advancing purchases in anticipation of an increase in import duties.”
The country will need record imports of vegetable oils in 2014-2015 as domestic supplies are cut by low oilseed production and poor crush margins, according to Hamburg-based Oil World.
Monsoon-sown oilseed output may drop 12 per cent to 19.7 million tonnes this year, the Agriculture Ministry estimates.
Imports may slow in the coming months because of congestion at ports and rising stockpiles, which probably reached two million tonnes at the end of last month, Meda said.
Traders are expecting an increase in import duties after Deepavali, he said.
Palm oil, used in everything from noodles to biofuels, fell 18 per cent this year as surging supplies from Southeast Asia topped estimates.
Futures must drop to RM1,900 a tonne to revive consumption, according to Dorab Mistry, director at Godrej International Ltd. Bloomberg