(Bloomberg) -- Palm oil imports by India probably fell for a fourth month after futures in Malaysia entered a bull market and ample domestic stockpiles prompted refiners and traders to cut purchases.
Imports dropped 2.5 percent to 790,000 metric tons in August from a year earlier, according to the median of five estimates in a Bloomberg survey of processors, brokers and analysts. Total vegetable oil purchases fell 1.4 percent to 1.36 million tons, the survey showed. The Solvent Extractors’ Association of India is set to release import data in the middle of the month.
Palm oil entered a bull market last month on rising demand ahead of festivals in China and India and as a slow recovery in El Nino-hit yields constrains supplies. The rally in prices has prompted some Indian buyers to switch to other edible oils to bridge a shortfall in domestic supplies.
“Demand is moderate because of high prices and stockpiles,” said Sandeep Bajoria, chief executive officer of Sunvin Group, a Mumbai-based broker and consultant for the oilseed industry. “There is disparity in Indian market. Imports will start increasing from September on festivals.”
The contract for November delivery on Bursa Malaysia Derivatives rose 0.9 percent to 2,632 ringgit a ton by the midday break in Kuala Lumpur on Friday, heading for a second weekly gain. Futures, which surged 9.1 percent in August, may rally to 3,000 ringgit by the end of the year with declining production in the fourth quarter, according to Barnabas Gan, an analyst at Oversea-Chinese Banking Corp.
Cooking oil stockpiles in the world’s biggest buyer totaled 2.15 million tons on Aug. 1, 30 percent more than the monthly consumption of 1.65 million tons, according to the association. Stockpiles climbed to a record 2.51 million tons in January, association data show.
Demand typically climbs during major Hindu festivals from September through November, when people consume more fried foods and sweets.
India’s soybean oil imports dropped 11 percent to 363,000 tons in August from a year earlier, while sunflower oil purchases advanced 17 percent to 120,000 tons, the survey showed. Canola oil purchases were 43,000 tons.
India relies on imports to meet more than 70 percent of its cooking oil needs. The country buys palm oil from Indonesia and Malaysia and soybean oil from the U.S., Brazil and Argentina.
|Imports||August 2016 (Survey)||July 2016 (SEA)||August 2015 (SEA)|
|Total Vegetable oil||1,355,000||1,140,685||1,374,049|